8.12 The summarized trading account of Change Ltd for 20X1 contained the following information:

Trading Account for 20X1

£ £

Sales 100,000 Less: Opening stock 7,000 Purchases 80,000 Closing stock (11,000)

Cost of goods sold 76,000 Gross profit 24,000 Opening stock is valued at marginal cost, but the directors have now decided that total cost is more suitable, and this basis was used for the purpose of valuing closing stock. The value of opening stock, on the total cost basis, is found to be £10,000.

(a) Prepare a revised trading account for Change Ltd complying with the consistency concept.

(b) Indicate the effect of the revision on the net profit figure reported by Change Ltd for 20X1.