Chi Inc. Date: 31 July 2023Details:Raw material inventory (paper):Cost: £33,000Replacement cost: £31,000Finished goods inventory:ProductLambdaMuDirect costs£65,000£50,000Proportion of...
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Accounting
Chi Inc.
Date: 31 July 2023
Details:
- Raw material inventory (paper):
- Cost: £33,000
- Replacement cost: £31,000
- Finished goods inventory:
Product | Lambda | Mu |
Direct costs | £65,000 | £50,000 |
Proportion of fixed overhead | £15,000 | £12,000 |
Proportion of selling costs | £3,500 | £3,000 |
Net realizable value | £100,000 | £75,000 |
- Vehicles:
Acquired on 1 August 2020 for £270,000, depreciated over 9 years using the straight-line method. - Buildings:
Acquired 13 years ago for £2,100,000, land value estimated at £550,000. Buildings are depreciated over 60 years. - Research and development:
- Research costs: £105,000
- Development costs: £130,000, benefiting over 7 years.
Required:
Discuss the accounting treatment for these items in Chi Inc.'s financial statements for the period ending 31 July 2023.
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