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Omicron Inc.
Date: 30 April 2024
Details:
- Raw material inventory (metal):
- Cost: £47,000
- Replacement cost: £45,000
- Finished goods inventory:
Product | Omicron | Pi |
Direct costs | £100,000 | £80,000 |
Proportion of fixed overhead | £24,000 | £20,000 |
Proportion of selling costs | £6,000 | £5,000 |
Net realizable value | £140,000 | £110,000 |
- Vehicles:
Acquired on 1 May 2019 for £340,000, depreciated over 10 years using the straight-line method. - Buildings:
Acquired 14 years ago for £2,700,000, land value estimated at £600,000. Buildings are depreciated over 50 years. - Research and development:
- Research costs: £260,000
- Development costs: £370,000, benefiting over 5 years.
Required:
Determine the appropriate accounting treatment for these items in Omicron Inc.'s financial statements as of 30 April 2024.
Answer & Explanation
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