Mu Ltd
 Date: 31 July 2023

Details:

• Raw materials inventory (ceramics):
  • Cost: £35,000
  • Replacement cost: £33,000
• Finished goods inventory:

Product	Omicron	Pi
Direct costs	£60,000	£50,000
Proportion of fixed overhead	£14,000	£12,000
Proportion of selling costs	£3,500	£3,000
Net realizable value	£95,000	£75,000

• Machinery:
   Acquired on 1 August 2019 for £360,000, depreciated over 8 years using the reducing balance method.
• Freehold property:
   Acquired 14 years ago for £2,000,000, land value estimated at £500,000. Buildings are depreciated over 50 years.
• Research and development:
  • Research costs: £230,000
  • Development costs: £310,000, benefiting over 5 years.

Required:
 Discuss the treatment of these items in Mu Ltd's financial statements for the year ending 31 July 2023.