You have been asked to help prepare the financial statements of Laing Ltd (Laing) for the year ended 31 March 2020. The companys trial balance as at 31 March 2020 is shown below.

(If you think there is an error term exsiting on the trial balance, please make assumption in order to arrive at final answer)

	Debit	Credit
	000	000
Plant & equipment at cost	46,330
Plant & equipment accumulated depreciation at 31 March 2020		16,451
Land (valuation) at 1 April 2019	12,000
Trade and other payables		22,916
Trade and other receivables	20,007
Allowance for doubtful debts		1,346
Cash at bank	14,554
Retained earnings at 1 April 2019		14,612
Share capital (1 shares)		14,800
Share premium		5,200
Revaluation reserve as at 1 April 2019		4,000
Draft profit for the year		8,500
6% loan note		13,000
Corporation Tax		85
Deferred taxation as at 1 April 2019		126
Inventories at 31 March 2020	8,145
	101,036	101,036

The following information is relevant:

After the year-end, inventories that cost 260,000 were found to be damaged and could only be sold for 132,000.

The land was revalued at 31 March 2020 and because of the effects of Brexit was found to be worth only 6 million. The land had an original cost of 8 million. Ignore deferred taxation effects of this revaluation.

At the year-end, Laing carried out an impairment test on its fleet of delivery vehicles which had a carrying amount of 2,400,000. The fair value, less costs to sell, of these delivery vehicles was deemed to be 1,693,000 and the value in use was calculated as 1,912,000. No adjustment has yet been made in respect of this impairment test.

The allowance for doubtful debts is to increase to 1,700,000 at 31 March 2020.

Laing pays annual rent for its head office in advance. An amount of 480,000 was paid on 1 July 2019.

Laing needs to accrue outstanding audit fees of 300,000.

The 6% loan note was issued on 1 April 2019 at its nominal value of 13 million. The direct costs of issue were 500,000 and these were charged to administrative expenses. The loan note will be redeemed at a premium in 2025. The effective rate of interest is 8% per annum. 6 months interest on the loan note was paid and charged to profit or loss on 1 October. No accrual was made for the other 6 months.

• The corporation tax balance of 85,000 included in the trial balance was the result of an over-estimate of the tax liability for the previous year. The corporation tax charge in respect of the profits for the current year to 31 March 2020 is estimated to be 1,680,000.

• At 31 March 2020, the tax base of Laing net assets (excluding land) was 4 million less than their carrying amounts. The movement on deferred tax should be taken to profit or loss. The income tax rate of Laing is 20%.

• The company issued 5,000,000 new ordinary shares during the year at an issue price of 1.60 per share (paid in cash) on 31 January 2020. The share issue has been correctly recorded in the trial balance at 31 March 2020.

• The company paid dividends of 5p per share on 31 December 2019 and 4p per share on 31 March 2020. The dividends paid have been treated as an expense in the calculation of the draft profit for the year.

REQUIRED

1. Calculate the revised profit figure for the year to 31 March 2020. (52 marks)

2. Draft the statement of financial position for Laing Ltd as at 31 March 2020 (48 marks)