Karen Retail’s draft Statement of financial position, shown below on the right, was approved by the board of directors for release to shareholders on 4 March 2012. Following events took place between 1 January 2012 and 4 March.

(a) The shopfittings were newly installed by Simon Smith whose original estimate was £800. Simon was paid money from time to time as work progressed. The style and nature of fittings were also amended. The fittings were completed by 30 December 2011 but the final bill from Simon, showing the total cost as £960, did not arrive till 19 January.

(b) It was only on 7 January that it was realised that inventory costing £20 was damaged by November 2011 rains. These goods had to be discarded.

(c) On 1 March 2012 a cheque for £35 was received from a customer whose debt had been written off already.

(d) The adjoining shop premises were also leased from 1 March 2012 and this doubles the retailing capacity.

Required: 

Taking account of the events after the reporting period re-draft the Statement of financial position as at 31 December 2011.

Transcribed Image Text:

Statement of financial position as at 31 December 2011 New shopfittings at cost Motor vehicles at cost Accumulated depreciation Current assets: Inventory Trade receivables Cash and bank 4 414 412 214 28 800 240 (108) 132 654 1,586