Aspirations Ltd commenced trading as wholesale suppliers of office equipment on 1 January 20X1, issuing ordinary shares of £1 each at par in exchange for cash. The shares were fully paid on issue, the number issued being 1,500,000.

The following financial statements, based on the historical cost concept, were compiled for 20X1.

The year 20X1 witnessed a surge of inflation and in consequence the directors became concerned about the validity of the revenue account and statement of financial position as income and capital statements. Index numbers reflecting price changes were:

Initial purchases of inventory were effected on 1 January 20X1 amounting to £34,375; the balance of purchases was evenly spread over the 12-month period. The non-current assets were acquired on 1 January 20X1 and, together with the initial inventor y, were paid for in cash on that day.

Required:

Prepare the accounts adjusted for current values using each of the three proposed models of current value accounting: namely, the accounting methods known as replacement cost, general (or current) purchasing power and net realizablevalue.

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Aspirations Ltd Statement of comprehensive income for the year ended 31 December 20XI Sales 868,425 Purchases 520,125 Less: Inventory 31 December 20XI 24,250 Cost of sales 495,875 Gross profit Expenses Depreciation 372,550 95,750 25,250 121,000 Net profit 251,550 Statement of financial position as at 31 December 20XI Depreciation Cost Non-current assets Freehold property Office equipment 650,000 6,500 643,500 356,250 375,000 18,750 999,750 025,000 25,250 Current assets 24,250 Inventories Trade receivables 253,500 1,090,300 Cash 1,368,050 Current liabilities 116,250 ,251,800 Non-current liabilities 500,000 751,800 1,751,550 Issued share capital 1,500,000 £l ordinary shares 1,500,000 Retained ear nings 251,550 1,751,550