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Delta Inc.
Date: 30 April 2024
Details:
- Raw material inventory (metal):
- Cost: £40,000
- Replacement cost: £38,000
- Finished goods inventory:
Product | Lambda | Kappa |
Direct costs | £80,000 | £55,000 |
Proportion of fixed overhead | £15,000 | £12,000 |
Proportion of selling costs | £4,000 | £3,000 |
Net realizable value | £120,000 | £70,000 |
- Vehicles:
Purchased on 1 May 2020 for £400,000, depreciated over 10 years with no residual value. Reducing balance method is used. - Buildings:
Acquired 20 years ago for £1,200,000, land value estimated at £300,000. Buildings are depreciated over 60 years. - Research and development:
- Research costs: £30,000
- Development costs: £40,000, benefiting over 4 years.
Required:
Prepare the journal entries to reflect the above adjustments in the books of Delta Inc. for the year ending 30 April 2024.
Answer & Explanation
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