Larissa Products produced a draft income statement for the most recent year which showed a profit...

Transcribed Image Text:

Larissa Products produced a draft income statement for the most recent year which showed a profit for the year of 93,100. Subsequent checking of the underlying records revealed that the following errors occurred when preparing this financial statement. 1. Machinery purchased at the beginning of the year for use within the business and costing 60,000 was included in cost of goods sold. The policy of the business is to depreciate such non-current assets at the rate of 50% using the reducing balance method. 2. Interest payable at the year end of 7,900 had not been taken into account. 3. Rent payable of 4,000 during the year had been treated as rent receivable. What is the revised profit for the year after taking account of the above errors? Larissa Products produced a draft income statement for the most recent year which showed a profit for the year of 93,100. Subsequent checking of the underlying records revealed that the following errors occurred when preparing this financial statement. 1. Machinery purchased at the beginning of the year for use within the business and costing 60,000 was included in cost of goods sold. The policy of the business is to depreciate such non-current assets at the rate of 50% using the reducing balance method. 2. Interest payable at the year end of 7,900 had not been taken into account. 3. Rent payable of 4,000 during the year had been treated as rent receivable. What is the revised profit for the year after taking account of the above errors?