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Psi Ltd Date: 31 December 2023Details:Raw material inventory (synthetics):Cost: £35,000Replacement cost: £33,000Finished goods inventory:ProductOmicronPiDirect costs£65,000£55,000Proportion of...

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Question

Accounting

Psi Ltd
 Date: 31 December 2023

Details:

  1. Raw material inventory (synthetics):
    • Cost: £35,000
    • Replacement cost: £33,000
  2. Finished goods inventory:

Product

Omicron

Pi

Direct costs

£65,000

£55,000

Proportion of fixed overhead

£18,000

£16,000

Proportion of selling costs

£5,000

£4,500

Net realizable value

£100,000

£80,000

  1. Vehicles:
     Acquired on 1 January 2018 for £320,000, depreciated over 10 years using the straight-line method.
  2. Buildings:
     Acquired 17 years ago for £2,600,000, land value estimated at £650,000. Buildings are depreciated over 55 years.
  3. Research and development:
    • Research costs: £580,000
    • Development costs: £1,010,000, benefiting over 5 years.

Required:
 Analyze the financial statement impact of these items for Psi Ltd as of 31 December 2023.

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