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Omicron Inc. Date: 30 September 2023Details:Raw material inventory (fiber):Cost: £40,000Replacement cost: £38,000Finished goods inventory:ProductGammaDeltaDirect costs£70,000£55,000Proportion of...

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Question

Accounting

Omicron Inc.
 Date: 30 September 2023

Details:

  1. Raw material inventory (fiber):
    • Cost: £40,000
    • Replacement cost: £38,000
  2. Finished goods inventory:

Product

Gamma

Delta

Direct costs

£70,000

£55,000

Proportion of fixed overhead

£20,000

£18,000

Proportion of selling costs

£5,500

£5,000

Net realizable value

£110,000

£85,000

  1. Vehicles:
     Acquired on 1 October 2017 for £320,000, depreciated over 9 years using the straight-line method.
  2. Buildings:
     Acquired 14 years ago for £2,700,000, land value estimated at £700,000. Buildings are depreciated over 55 years.
  3. Research and development:
    • Research costs: £500,000
    • Development costs: £850,000, benefiting over 7 years.

Required:
 Discuss the accounting treatment for these items in Omicron Inc.'s financial statements for the period ending 30 September 2023.

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