perfect pies pp ltd makes pies pastries and pizzas which it sells to retailers under 545493

AUDITING Coursework 2014 Study the case below and answer the questions that follow it. PERFECT PIES LTD Perfect Pies (PP)ltd makes pies, pastries and pizzas, which it sells to retailers under its own brand name and also supplies a major super market chain. It has two sites: the bakery and its head office at Darlington, and a distribution depot in Wolverhampton. PP’s year end is 31 March 2013 and its accounts are required to be ready for publication by 31 May 2013. It is now 8th May and the final audit work is due to be completed by 16th May. The manager in charge of the audit is reviewing the audit file with a view to identifying any unresolved problems. (You may assume an interim audit has been performed and that its results were satisfactory except for any deficiencies specifically mentioned in the case study.) 1.0 Summary of results 2013 2012 £000 £000 Turnover 3768 3477 Gross Profit 1240 1199 GP% 32.9% 34.5% Net Profit 308 289 Corporation Tax 62 57 Dividend 138 120 Fixed Assets 1940 1745 Stock 140 195 Debtors 712 597 Bank balances 43 51 Current Liabilities (433) (494) Net Assets 2402 2094 £000 £000 Share Capital 1840 1840 Reserves 562 254 Shareholders’ funds 2402 2094 1.1 Stock summary 2013 2012 £000 £000 At Darlington Finished products 43 61 Raw materials 41 48 Packing materials 38 47 At Wolverhampton: Finished products 18 39 Total 140 195 Notes: The following audit work has been carried out on the stock at Darlington: – attended physical stocktake held on 31 March and performed test counts; – ensured that material items of stock had been valued at the lower of cost and net realisable value; – ensured that none of the stock on hand at 31 March was damaged or out of condition The…