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After the accountant of Strikers Ltd had prepared the financial statements for the year ended 30 June 2020, the following errors came to light: A
After the accountant of Strikers Ltd had prepared the financial statements for the year ended 30 June 2020, the following errors came to light:
- A motor van purchased at a cost of $12,000, with accumulated depreciation at the beginning of the year of $4,000, had been depreciated at 20% using the reducing-balance method rather than the straight-line method of depreciation.
- The payment of $1,500 for a trade payable had been treated as a cash purchase.
- Withdrawals by the owner of $3,000 during the year had been treated as part of the salaries and wages expense.
- Bank charges of $400 during the year had been treated as interest charges.
Required:
What is the effect on profit of each of these errors?
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