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Eta Ltd
Date: 31 March 2024
Details:
- Raw materials inventory (steel):
- Cost: £32,000
- Replacement cost: £30,000
- Finished goods inventory:
Product | Theta | Lambda |
Direct costs | £65,000 | £55,000 |
Proportion of fixed overhead | £18,000 | £15,000 |
Proportion of selling costs | £4,000 | £3,500 |
Net realizable value | £100,000 | £85,000 |
- Office machinery:
Acquired on 1 April 2016 for £280,000, depreciated over 10 years using the reducing balance method. - Freehold property:
Acquired 18 years ago for £2,400,000, land value estimated at £700,000. Buildings are depreciated over 55 years. - Research and development:
- Research costs: £180,000
- Development costs: £230,000, benefiting over 5 years.
Required: Explain how these items should be reflected in Eta Ltd's balance sheet and income statement for the year ending 31 March 2024.
Answer & Explanation
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