Rose Limited operates a small chain of retail shops that sell high-quality teas and coffees.

Approximately half of sales are on credit. Abbreviated and unaudited financial statements are given below:

Rose Limited Income statement (profit and loss account) for the year ended 31 March 2006

£000 £000 Revenue 12,080 Cost of sales (6,282)

Gross profit 5,798 Labour costs (2,658)

Depreciation (625)

Other operating costs (1,003)

(4,286)

Net profit before interest 1,512 Interest payable (66)

Net profit before tax 1,446 Tax payable (434)

Net profit after tax 1,012 Dividend paid (300)

Retained profit for year 712 Retained profit brought forward 756 Retained profit carried forward 1,468 Balance sheet as at 31 March 2006 £000 £000 Non-current assets 2,728 Current assets Inventories (stock) 1,583 Receivables (debtors) 996 Cash 26 2,605 Current liabilities Trade payables (creditors) (1,118)
Other payables (creditors) (417)
Tax (434)
Overdraft (596)
(2,565)
Net current assets 40 Non-current liabilities Secured loan (2011) (300)
2,468 Equity Share capital (50p shares, fully paid) 750 Share premium 250 Retained profit 1,468 2,468 Since the unaudited financial statements for Rose Limited were prepared, the following information has become available:
1 An additional £74,000 of depreciation should have been charged on fixtures and fittings.
2 Invoices for credit sales on 31 March 2006 amounting to £34,000 have not been included; cost of sales is not affected.
3 Bad debts should be provided at a level of 2 per cent of receivables at the year end.
4 Inventories, which had been purchased for £2,000, have been damaged and are unsaleable. This is not reflected in the financial statements.
5 Fixtures and fittings to the value of £16,000 were delivered just before 31 March 2006, but these assets were not included in the financial statements and the purchase invoice had not been processed.
6 Wages for Saturday-only staff, amounting to £1,000, have not been paid for the final Saturday of the year. This is not reflected in the financial statements.
7 Tax is payable at 30 per cent of net profit after tax. Assume that it is payable shortly after the year-end.
Required:
Prepare revised financial statements for Rose Limited for the year ended 31 March 2006, incorporating the information in 1–7 above. Note: Work to the nearest £1,000.