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Chi Ltd
Date: 30 September 2023
Details:
- Raw materials inventory (paper):
- Cost: £29,000
- Replacement cost: £27,000
- Finished goods inventory:
Product | Alpha | Beta |
Direct costs | £60,000 | £50,000 |
Proportion of fixed overhead | £14,000 | £12,000 |
Proportion of selling costs | £4,000 | £3,500 |
Net realizable value | £95,000 | £75,000 |
- Machinery:
Acquired on 1 October 2017 for £280,000, depreciated over 9 years using the reducing balance method. - Freehold property:
Acquired 18 years ago for £2,500,000, land value estimated at £600,000. Buildings are depreciated over 55 years. - Research and development:
- Research costs: £330,000
- Development costs: £510,000, benefiting over 5 years.
Required:
Prepare the necessary journal entries for these items in Chi Ltd's financial records for the period ending 30 September 2023.
Answer & Explanation
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