7.7 During the preparation of the accounts from the books of S. Top, a sole trader, for the year to 30 June 20X7, the following items were found:

1 Included in the repairs to machinery account was £2,750, which was paid on 29 June 20X7 and was for the purchase of a new lathe.

2 Manufacturing wages account included £350 paid to an employee for time spent repairing a machine.

3 A debt of £1,290 due from J. Jones was included in debtors, but in fact was irrecoverable.

4 The rates on S. Top’s private house of £200 had been paid by the business and charged to the rates account.

5 Goods worth £1,500 had been received into stock on 30 June and included in the value of stock for accounts purposes. No entry had been made in the books to record this purchase.

6 An old machine that had cost £1,000 and was fully depreciated had been scrapped during the year. This fact had not been recorded in the books.

7 S. Top had taken stock to the value of £150 for his own use during the year. No entry appeared in the books in respect of this usage.

8 A payment of £125 for delivery of goods to customers had been entered in the purchases account.

(a) Prepare the journal entries to record the adjustments.

(b) Prepare a statement to show the effect of these adjustments on the profit for the year to 30 June 20X7.