Mu Ltd Date: 31 July 2023Details:Raw materials inventory (ceramics):Cost: £35,000Replacement cost: £33,000Finished goods inventory:ProductOmicronPiDirect costs£60,000£50,000Proportion of...
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Accounting
Mu Ltd
Date: 31 July 2023
Details:
- Raw materials inventory (ceramics):
- Cost: £35,000
- Replacement cost: £33,000
- Finished goods inventory:
Product | Omicron | Pi |
Direct costs | £60,000 | £50,000 |
Proportion of fixed overhead | £14,000 | £12,000 |
Proportion of selling costs | £3,500 | £3,000 |
Net realizable value | £95,000 | £75,000 |
- Machinery:
Acquired on 1 August 2019 for £360,000, depreciated over 8 years using the reducing balance method. - Freehold property:
Acquired 14 years ago for £2,000,000, land value estimated at £500,000. Buildings are depreciated over 50 years. - Research and development:
- Research costs: £230,000
- Development costs: £310,000, benefiting over 5 years.
Required:
Discuss the treatment of these items in Mu Ltd's financial statements for the year ending 31 July 2023.
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