Wheatcroft owns and runs a computer supplies and repair shop. He has operated for a number of years and has generally been successful.

He has never worried about expansion, particularly as he would rather avoid having to manage a larger business and prefers to avoid the administration that this may bring. He is preparing financial statements for the year ended 31 December 2027 and wants your advice on a number of issues:

a. He sells blank recordable discs which he purchases from a wholesaler in bulk. At the end of the year he has a very small number left in stock. Should these be included within current assets as inventory?

b. He performs an annual service every November on a local school’s computer network. However, the school has delayed the service and it will now be undertaken in January 2028.

Should this still be included in the 2027 income statement?

c. He has worked out that he could boost his profits if he extended the lifespan of his non-current assets as it would lead to a lower depreciation charge each year. Should he do this?

Using knowledge of accounting concepts, advise Wheatcroft on the three points he has raised.