Using the information from Exercise 35.12, prepare statements of financial position on current cost and historic cost bases at 31 December 20X0.

Data From Exercise 35.12

McKee Ltd commenced trading on 1 January 20X0, selling a single type of imported DVD player. The company’s opening statement of financial position is shown below:

All assets are shown at cost on 1 January 20X0.
At 31 December 20X0:
a. The company had a bank balance of £20,000;
b. The company was owed £140,000 by trade customers (none were considered irrecoverable or doubtful).
c. The company held an inventory of 2,000 DVD players which were valued for historical cost purposes on a FIFO basis at a cost price of £125 each. The current replacement cost of DVD players at 31 December was £130 per unit.
d. An independent valuer certified that a 20-year lease on a comparable building would now cost £550,000.
e. Plant and equipment, which has an expected useful life of 15 years, with no terminal value, could be replaced new at 20 per cent more than their original cost. 

During the year the company’s transactions were:

In terms of sales, current cost and historical cost are the same.

Required
Prepare a statement of comprehensive income in current costs, with comparable historic cost figures (use straight-line depreciation for non-current assets). When valuing expense items in the statement of comprehensive income (current cost) use the average values for the year.

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Statement of financial position as at 1 January 20X0 ASSETS Non-current assets Leasehold buildings Plant and equipment Current assets Inventories (8,000 DVD players) Total assets EQUITY AND LIABILITIES Equity share capital Current liabilities Bank overdraft Total equity and liabilities £ 500,000 160,000 660,000 800,000 800,000 1,460,000 1,000,000 460,000 1,460,000