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Tau Ltd
Date: 30 June 2024
Details:
- Raw material inventory (cotton):
- Cost: £34,000
- Replacement cost: £32,000
- Finished goods inventory:
Product | Theta | Iota |
Direct costs | £75,000 | £60,000 |
Proportion of fixed overhead | £20,000 | £18,000 |
Proportion of selling costs | £5,500 | £5,000 |
Net realizable value | £120,000 | £95,000 |
- Vehicles:
Acquired on 1 July 2016 for £360,000, depreciated over 8 years using the straight-line method. - Buildings:
Acquired 13 years ago for £2,500,000, land value estimated at £600,000. Buildings are depreciated over 55 years. - Research and development:
- Research costs: £300,000
- Development costs: £450,000, benefiting over 6 years.
Required:
Detail how these items should be reflected in Tau Ltd's balance sheet and income statement for the period ending 30 June 2024.
Answer & Explanation
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