A Yuan Ltd has an accounting year ended 28 February 2011. Due to staff shortages, the stocktaking had not been undertaken until 9 March 2011 and the inventory valued at this date is £100,600. This value was also used in the company draft accounts for the year ended 28 February 2011 which showed a net profit of £249,600 and a current asset total of £300,000. The selling price of goods is based on cost plus 25%. During the company audit, the following errors were discovered: 1 Sales invoices for goods dispatched to customers during the period 1–9 March 2011 amounted to £43,838 which include carriage on sales of 5%. 2 Goods costing £14,000 were delivered to the company during the period 1–9 March 2011. 3 During the period 1–9 March 2011, returns from customers at selling price were £4,170, and returns to suppliers amounted to £850. 4 The inventory valuation of 9 March 2011 included the inventory of the company’s office cleaning materials. These materials had all been bought during February 2011 at a cost of £600.

5 Inventory with a selling price of £1,650 had been borrowed by the marketing department on 27 February 2011 to be displayed at an exhibition from 28 February to 16 March. This had helped to attract orders of £27,400 for delivery in April 2011. 6 Inventory with a selling price of £800 was sent to a customer on sale or return basis on 14 February 2011. On 23 February 2011, the customer sold half of the consignment. This credit sale had not yet been recorded in Yuan Ltd’s accounts for the year ended 28 February 2011. On 9 March 2011, the remaining half of the consignment had not been returned to Yuan Ltd, and the customer had not signified its acceptance. 7 On 3 March 2011, Yuan Ltd. received a batch of free samples which had been included in the inventory valuation at the list price of £20. Required:

(a) Prepare a schedule amending the inventory figure as at 28 February 2011.

(b) Calculate the revised net profit for the year ending 28 February 2011 and the correct value of current assets at that date.