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Omicron Inc. Date: 31 July 2023Details:Raw material inventory (plastic):Cost: £30,000Replacement cost: £28,000Finished goods inventory:ProductAlphaBetaDirect costs£65,000£55,000Proportion of...

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Question

Accounting

Omicron Inc.
 Date: 31 July 2023

Details:

  1. Raw material inventory (plastic):
    • Cost: £30,000
    • Replacement cost: £28,000
  2. Finished goods inventory:

Product

Alpha

Beta

Direct costs

£65,000

£55,000

Proportion of fixed overhead

£18,000

£16,000

Proportion of selling costs

£5,500

£5,000

Net realizable value

£105,000

£85,000

  1. Furniture:
     Acquired on 1 August 2017 for £310,000, depreciated over 10 years using the straight-line method.
  2. Buildings:
     Acquired 14 years ago for £2,700,000, land value estimated at £650,000. Buildings are depreciated over 55 years.
  3. Research and development:
    • Research costs: £740,000
    • Development costs: £1,330,000, benefiting over 6 years.

Required:
 Analyze the financial statement impact of these items for Omicron Inc. as of 31 July 2023.

Answer & Explanation Solved by verified expert
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