Robin Dale Ltd, a wholesalers, prepared his draft Statement of financial position as shown. Following events occurred prior to the approval of the financial statements by the Directors of the company on 4 August 2012:

(a) Inventory reported at £826,000 includes £30,000, the cost of certain items which were shop-soiled and which can be sold for only £21,000 after being reconditioned at a cost of £3,000. The shop-soiling was detected only on 3 July 2012.

(b) Collin Dare from whom £50,000 was receivable was adjudicated bankrupt on 17 July 2012. In a letter dated 24 July the trustee in bankruptcy has warned Robin Dale Ltd not to expect more than 10p in £1.

(c) Investments reported as a current asset on the Statement of financial position includes at £54,000 the cost of 90,000 ordinary shares of £1 each. These shares had been quoted at 80p each on 30 June 2012, but were sold for £48,000 two weeks later.

Required:

(a) Advise Robin Dale Ltd on how these events after reporting date should be treated when accounts are finalised for the year ended 30 June 2012.

(b) On the basis that your advice is accepted prepare a revised Statement of financial position as at 30 June 2012 along with any notes.

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Statement of financial position as at 30 June 2012 Cost Non-current assets 364 Current assets: Inventory Trade receivables Investments Cash and bank Accumulated depreciation (112) 826 468 112 34 £'000 252 1,440 1,692