Iota Ltd
 Date: 31 July 2023

Details:

• Raw materials inventory (ceramics):
  • Cost: £30,000
  • Replacement cost: £28,000
• Finished goods inventory:

Product	Rho	Sigma
Direct costs	£55,000	£45,000
Proportion of fixed overhead	£12,000	£11,000
Proportion of selling costs	£3,000	£2,500
Net realizable value	£80,000	£60,000

• Office machinery:
   Acquired on 1 August 2018 for £200,000, depreciated over 8 years using the reducing balance method.
• Freehold property:
   Acquired 18 years ago for £1,500,000, land value estimated at £350,000. Buildings are depreciated over 40 years.
• Research and development:
  • Research costs: £40,000
  • Development costs: £50,000, benefiting over 6 years.

Required:
 Analyze how these items will affect the financial statements of Iota Ltd as of 31 July 2023.