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Epsilon Ltd Date: 31 March 2023Details:Raw materials inventory (textiles):Cost: £50,000Replacement cost: £55,000Finished goods inventory:ProductMuNuDirect costs£90,000£60,000Proportion of...

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Question

Accounting

Epsilon Ltd
 Date: 31 March 2023

Details:

  • Raw materials inventory (textiles):
    • Cost: £50,000
    • Replacement cost: £55,000
  • Finished goods inventory:

Product

Mu

Nu

Direct costs

£90,000

£60,000

Proportion of fixed overhead

£18,000

£15,000

Proportion of selling costs

£5,000

£4,000

Net realizable value

£130,000

£80,000

  • Office equipment:
     Acquired on 1 April 2021 for £100,000, depreciated over 5 years using the straight-line method.
  • Freehold property:
     Acquired 10 years ago for £900,000, land value estimated at £250,000. Buildings are depreciated over 50 years.
  • Research and development:
    • Research costs: £15,000
    • Development costs: £20,000, benefiting over 7 years.

Required:
 Evaluate how each of these items should be recorded in Epsilon Ltd's financial statements for the year ending 31 March 2023.

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