Phi Ltd
 Date: 31 August 2023

Details:

1. Raw material inventory (synthetics):
   • Cost: £50,000
   • Replacement cost: £48,000
2. Finished goods inventory:

Product	Omicron	Pi
Direct costs	£80,000	£65,000
Proportion of fixed overhead	£20,000	£18,000
Proportion of selling costs	£6,000	£5,000
Net realizable value	£125,000	£100,000

3. Furniture:
    Acquired on 1 September 2016 for £300,000, depreciated over 8 years using the straight-line method.
4. Buildings:
    Acquired 15 years ago for £2,700,000, land value estimated at £700,000. Buildings are depreciated over 55 years.
5. Research and development:
   • Research costs: £320,000
   • Development costs: £490,000, benefiting over 6 years.

Required:
 Analyze the financial statement impact of these items for Phi Ltd as of 31 August 2023.