Hanson Stores finalises its accounts on 31 March 2011, but was unable to do a physical inventory count until 6 April 2011. Inventory was then physically counted and entered on inventory sheets. Every item on the inventory sheets was then priced at cost. The total value of inventory on hand, at cost price, was determined as £216,400. You have ascertained as follows:

(i) Adjustments required for movements between the year-end and the date of the inventory: 

Between 1.4.2011 and the time the inventory was taken, purchases amounted to £48,400, sales to £74,100 and sales returns to £2,100. The figure of sales referred to includes goods invoiced at £6,000 but which were not delivered to customers until 8.4.2011 which was after the time inventory was taken. Hanson Stores fixes the sales price to achieve a profit margin of 50% on cost.

(ii) Adjustments required for errors in taking inventory:

■ A subtotal of £156,500 has been carried forward from one inventory sheet to the next as £165,500.

■ Inventory sheets include packing material costing £1,600 and unused stationery costing £2,800.

(iii) Adjustment required for inventory held by third parties at the time of the inventory was taken: certain goods costing £164,400 included within purchases in the year to 31.3.2011 were not cleared from the bonded warehouse until the second week of April 2011.

(iv) Adjustment required for inventory held by customers: Inventory with customers on sale or return basis on 31 March 2011 had been pro forma invoiced to them (as usual at cost plus 50%) for £5,400. A third of these goods had been returned by 6 April and the rest retained by customers. (A pro forma invoice is a sample invoice – no sale is recognised until the customer confirms retention of goods or passing of return deadline.)

(v) Adjustment required for items expected to be sold at or below cost: Included in the Inventory sheets at cost of £14,400 are certain shop-soiled items which are expected to be sold at only £12,000 and subject to the payment of sales commission of 5%.

Required: Determine the value of inventory to be included in the Statement of income for the year ended 31 March 2011 and the Statement of financial position as at 31 March 2011.