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.
Answer & Explanation
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