Xi Ltd Date: 31 July 2023Details:Raw materials inventory (cotton):Cost: £28,000Replacement cost: £26,000Finished goods inventory:ProductOmicronPiDirect costs£65,000£55,000Proportion of...
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Accounting
Xi Ltd
Date: 31 July 2023
Details:
- Raw materials inventory (cotton):
- Cost: £28,000
- Replacement cost: £26,000
- Finished goods inventory:
Product | Omicron | Pi |
Direct costs | £65,000 | £55,000 |
Proportion of fixed overhead | £18,000 | £16,000 |
Proportion of selling costs | £4,500 | £4,000 |
Net realizable value | £100,000 | £80,000 |
- Office machinery:
Acquired on 1 August 2018 for £280,000, depreciated over 8 years using the reducing balance method. - Freehold property:
Acquired 16 years ago for £2,600,000, land value estimated at £650,000. Buildings are depreciated over 55 years. - Research and development:
- Research costs: £490,000
- Development costs: £830,000, benefiting over 6 years.
Required:
Determine the appropriate accounting treatment for these items in Xi Ltd's financial statements as of 31 July 2023.
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