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Iota Corporation
Date: 31 January 2024
Details:
- Raw material inventory (rubber):
- Cost: £37,000
- Replacement cost: £35,000
- Finished goods inventory:
Product | Gamma | Delta |
Direct costs | £60,000 | £50,000 |
Proportion of fixed overhead | £16,000 | £14,000 |
Proportion of selling costs | £4,000 | £3,500 |
Net realizable value | £95,000 | £75,000 |
- Vehicles:
Acquired on 1 February 2018 for £350,000, depreciated over 9 years using the straight-line method. - Buildings:
Acquired 17 years ago for £2,100,000, land value estimated at £450,000. Buildings are depreciated over 55 years. - Research and development:
- Research costs: £200,000
- Development costs: £250,000, benefiting over 4 years.
Required:
Explain the impact of these items on the financial statements of Iota Corporation for the year ending 31 January 2024.
Answer & Explanation
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