Presented below is a draft set of financial statements for Chips Limited.

Chips Limited Income statement (profit and loss account) for the year ended 30 June 2006

£000 £000 Revenue 1,850 Cost of sales (1,040)

Gross profit 810 Less Depreciation (220)

Other operating costs (375) (595)

Operating profit 215 Interest payable (35)

Profit before taxation 180 Taxation (60)

Profit after taxation 120 Balance sheet as at 30 June 2006 Cost Depreciation

£000 £000 £000 Non-current assets Property, plant and equipment Buildings 800 (112) 688 Plant and equipment 650 (367) 283 Motor vehicles 102 (53) 49 1,552 (532) 1,020 Current assets Inventories (stock) 950 Trade receivables (debtors) 420 Cash at bank 16 1,386 Less Current liabilities Trade payables (creditors) (361)

Other payables (creditors) (117)

Taxation (60)

(538)

Net current assets 848 Less Non-current liabilities Secured 10% loan (700)

1,168 Equity Ordinary shares of £1, fully paid 800 Reserves at 1 July 2005 248 Profit for the year 120 368 1,168 The following additional information is available:
1 Purchase invoices for goods received on 29 June 2006 amounting to £23,000 have not been included. This means that the cost of sales figure in the income statement has been understated.
2 A motor vehicle costing £8,000 with depreciation amounting to £5,000 was sold on 30 June 2006 for £2,100, paid by cheque. This transaction has not been included in the company’s records.
3 No depreciation on motor vehicles has been charged. The annual rate is 20 per cent of cost at the year end.
4 A sale on credit for £16,000 made on 1 July 2006 has been included in the financial statements in error. The cost of sales figure is correct in respect of this item.
5 A half-yearly payment of interest on the secured loan due on 30 June 2006 has not been paid.
6 The tax charge should be 30 per cent of the reported profit before taxation. Assume that it is payable, in full, shortly after the year-end.
Required:
Prepare a revised set of financial statements incorporating the additional information in 1–6 above. Note: Work to the nearest £1,000.