You are the financial accountant of Twister pic. The managing director has the following draft accounts. She is not happy.

1. The company’s sales policy is to record sales prudently, one month after invoicing the customer so as to allow for any sales returns. If the company recorded sales when invoiced, this would increase sales by £150,000.
2. This is a prudent valuation, a more optimistic valuation gives £65,000.
3. Depreciation is currently charged on fixed assets over ten years. This is a realistic expected life, but a competitor charges depreciation over 15 years.
4. Half the interest payable relates to the borrowing of money to finance the construction of fixed assets.
Required: Using the accounts, and the notes above, present as flattering a profit as you can.

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Sales 1 Less: Cost of Sales Twister plc: Draft Income Statement Year Ended 30 June 2005 Opening inventory Add Purchases Less Closing inventory Gross Profit Less Expenses Depreciation Interest payable Other expenses Net Loss Notes 000 000 750 80 320 400 2 60 340 410 34 60 30 332 422 (12)