Question
Blackheath Engineering Ltd prepared draft financial statements for the most recent year, which reported a profit for the year of 150,000. A subsequent check of
Blackheath Engineering Ltd prepared draft financial statements for the most recent year, which reported a profit for the year of 150,000. A subsequent check of the financial statements found the following errors:
1. | An audit fee for the year of 4,500 had not been taken into account. |
2. | Cash received from a trade receivable of 20,000 had been treated as a cash sale. |
3. | The net realisable value of inventories of 213,000 had been used but the cost of the inventories was 180,000. |
The company pays corporation tax of 20 per cent on reported profits before tax.
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