Pi Ltd Date: 30 April 2024Details:Raw materials inventory (ceramics):Cost: £33,000Replacement cost: £31,000Finished goods inventory:ProductThetaIotaDirect costs£70,000£55,000Proportion of...
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Accounting
Pi Ltd
Date: 30 April 2024
Details:
- Raw materials inventory (ceramics):
- Cost: £33,000
- Replacement cost: £31,000
- Finished goods inventory:
Product | Theta | Iota |
Direct costs | £70,000 | £55,000 |
Proportion of fixed overhead | £18,000 | £16,000 |
Proportion of selling costs | £4,000 | £3,500 |
Net realizable value | £110,000 | £85,000 |
- Machinery:
Acquired on 1 May 2018 for £330,000, depreciated over 10 years using the reducing balance method. - Freehold property:
Acquired 18 years ago for £2,800,000, land value estimated at £750,000. Buildings are depreciated over 60 years. - Research and development:
- Research costs: £510,000
- Development costs: £870,000, benefiting over 6 years.
Required:
Explain how these items should be accounted for in Pi Ltd's financial statements for the period ending 30 April 2024.
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