Gamma Ltd
 Date: 31 August 2023

Details:

• Raw materials inventory (metal):
  • Cost: £55,000
  • Replacement cost: £53,000
• Finished goods inventory:

Product	Rho	Sigma
Direct costs	£70,000	£55,000
Proportion of fixed overhead	£18,000	£15,000
Proportion of selling costs	£4,000	£3,500
Net realizable value	£105,000	£85,000

• Office equipment:
   Acquired on 1 September 2020 for £180,000, depreciated over 7 years using the reducing balance method.
• Freehold property:
   Acquired 18 years ago for £2,700,000, land value estimated at £650,000. Buildings are depreciated over 55 years.
• Research and development:
  • Research costs: £140,000
  • Development costs: £180,000, benefiting over 6 years.

Required:
 Analyze how these items will be reflected in Gamma Ltd's balance sheet and income statement for the year ending 31 August 2023.