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Gamma Ltd
Date: 31 August 2023
Details:
- Raw material inventory (plastic):
- Cost: £32,000
- Replacement cost: £30,000
- Finished goods inventory:
Product | Theta | Iota |
Direct costs | £70,000 | £60,000 |
Proportion of fixed overhead | £18,000 | £16,000 |
Proportion of selling costs | £5,500 | £5,000 |
Net realizable value | £110,000 | £90,000 |
- Furniture:
Acquired on 1 September 2016 for £310,000, depreciated over 9 years using the straight-line method. - Buildings:
Acquired 14 years ago for £2,700,000, land value estimated at £650,000. Buildings are depreciated over 55 years. - Research and development:
- Research costs: £860,000
- Development costs: £1,570,000, benefiting over 7 years.
Required: Prepare the necessary journal entries for these items in Gamma Ltd's financial records for the period ending 31 August 2023.
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