The finance director of Toy plc has been asked by a shareholder to explain items that appear in the current cost statement of comprehensive income for the year ended 31.8.20X9 and the statement of financial position as at that date:

Required:
(a) Explain what each of the items numbered 1€“6 represents and the purpose of each.
(b) What do you consider to be the benefits to users of providing current costinformation?

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Historical cost profit 43,000 Cost of sales adjustment 0,000 6,000 2,500 Additional depreciation Monetary working capital adjustment Current cost operating profit before tax Gearing adjustment CCA operating profit 18,500 24,500 2,600 27,100 428,250 (95,650) Non-current assets at gross replacement cost Accumulated current cost depreciation Net current assets 12% debentures 332,600 21,400 58 Issued share capital Current cost reserve Retained earnings 250,000 75,000 71,000 96,000