Omicron Inc. Date: 30 September 2023Details:Raw material inventory (fiber):Cost: £40,000Replacement cost: £38,000Finished goods inventory:ProductGammaDeltaDirect costs£70,000£55,000Proportion of...
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Accounting
Omicron Inc.
Date: 30 September 2023
Details:
- Raw material inventory (fiber):
- Cost: £40,000
- Replacement cost: £38,000
- Finished goods inventory:
Product | Gamma | Delta |
Direct costs | £70,000 | £55,000 |
Proportion of fixed overhead | £20,000 | £18,000 |
Proportion of selling costs | £5,500 | £5,000 |
Net realizable value | £110,000 | £85,000 |
- Vehicles:
Acquired on 1 October 2017 for £320,000, depreciated over 9 years using the straight-line method. - Buildings:
Acquired 14 years ago for £2,700,000, land value estimated at £700,000. Buildings are depreciated over 55 years. - Research and development:
- Research costs: £500,000
- Development costs: £850,000, benefiting over 7 years.
Required:
Discuss the accounting treatment for these items in Omicron Inc.'s financial statements for the period ending 30 September 2023.
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