a) Staff meals amounting to £11,000 have been incorrectly included in cost of sales b) Invoices for credit sales on 31 December 2019 amounting to £52,000 have not been included, cost of sales is not affected. c) An additional £63,000 of depreciation should have been charged on fixtures and fittings. cl) Trade receivables totalling £17,000 are recognised as having gone bad, but they have not been written off e) Wages for casual catering staff, amounting to E2,000, have not been paid for the final week of the year This is not reflected in the financial statements f) Other operating costs include payments of (240,000 for 12 months rent up to 31st March 2020. g) Tax is payable at 19 per cent of profit before taxation Assume it is payable shortly after the year end. h) As at January 1″ 2019 the Retained earnings account showed a Loss of (97’0,000
You are required to*,
a) Prepare a revised Profit & Loss Account (Income & Expenditure Account) and Balance Sheet (Statement of Financial Position) incorporating the additional information in a) to g) Please show your workings (30 marks)
b) Explain the purpose of the statutory cash flow statement Comment on the value of the three key sections (10 marks)