Xi Ltd
 Date: 31 July 2023

Details:

• Raw materials inventory (cotton):
  • Cost: £28,000
  • Replacement cost: £26,000
• Finished goods inventory:

Product	Omicron	Pi
Direct costs	£65,000	£55,000
Proportion of fixed overhead	£18,000	£16,000
Proportion of selling costs	£4,500	£4,000
Net realizable value	£100,000	£80,000

• Office machinery:
   Acquired on 1 August 2018 for £280,000, depreciated over 8 years using the reducing balance method.
• Freehold property:
   Acquired 16 years ago for £2,600,000, land value estimated at £650,000. Buildings are depreciated over 55 years.
• Research and development:
  • Research costs: £490,000
  • Development costs: £830,000, benefiting over 6 years.

Required:
 Determine the appropriate accounting treatment for these items in Xi Ltd's financial statements as of 31 July 2023.