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Sigma Corporation
Date: 31 October 2023
Details:
- Raw materials inventory (rubber):
- Cost: £36,000
- Replacement cost: £34,000
- Finished goods inventory:
Product | Gamma | Delta |
Direct costs | £65,000 | £55,000 |
Proportion of fixed overhead | £18,000 | £15,000 |
Proportion of selling costs | £4,000 | £3,500 |
Net realizable value | £100,000 | £85,000 |
- Office machinery:
Acquired on 1 November 2018 for £260,000, depreciated over 10 years using the reducing balance method. - Freehold property:
Acquired 20 years ago for £2,800,000, land value estimated at £700,000. Buildings are depreciated over 55 years. - Research and development:
- Research costs: £290,000
- Development costs: £430,000, benefiting over 5 years.
Required: Explain the financial statement impacts for Sigma Corporation as of 31 October 2023, considering these details.
Answer & Explanation
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