Pi Ltd
 Date: 31 December 2023

Details:

• Raw materials inventory (plastic):
  • Cost: £38,000
  • Replacement cost: £36,000
• Finished goods inventory:

Product	Alpha	Beta
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	£110,000	£85,000

• Machinery:
   Acquired on 1 January 2017 for £320,000, depreciated over 12 years using the reducing balance method.
• Freehold property:
   Acquired 18 years ago for £2,400,000, land value estimated at £700,000. Buildings are depreciated over 55 years.
• Research and development:
  • Research costs: £270,000
  • Development costs: £390,000, benefiting over 6 years.

Required:
 Discuss how these items should be accounted for in Pi Ltd's financial statements for the period ending 31 December 2023.