AAA Pty Ltd prepared the draft of the statement of financial position and the statement of profit or loss for the financial year ended 31^st Dec. 20X8 as shown below. The business operation was started from 1^st Jan. 20X8. All transactions incurred in the year 20X8 were recorded correctly. The PPE was purchased for $20,000 but carried at fair value $18,000.

AAA Pty Ltd
Statement of profit or loss
As at 31 December 20X8
Income
Hire revenue	140,000
Service revenue received in advance	20,000
PPE revaluation surplus	2,000
Total income		162,000
Expenses
Electricity expense	13,000
Prepaid rent expense	24,800
Wages expense	20,200
dividends	6,000
Income tax expense	30,000
Total expenses		94,000
Profit		68,000
AAA Pty Ltd
Statement of financial position
For the year ended 31 December 20X8
Assets
Cash	65,400
Accounts receivable	110,000
Supplies	9,500
PPE	18,000
Acc. Dep.	(4,000)
GST collected	10,000
Total assets		210,900
Liabilities
Accounts payable	20,000
Note payable	12,500
GST paid	5,600
Total liability		38,100
Equity
Share capital	30,000
Retained earnings	70,800
General reserve	63,000
Total equity		163,800

Required: (please label your responses as 1.,2.)

1. Identify individual errors in the statement of profit and loss and briefly explain how to correct the identified errors. (5/11)
2. Identify individual errors in the statement of financial position and briefly explain how to correct the identified errors. (6/11)

(Note: ignore the errors in the calculation of summations.)