Mr. Roxy sells car batteries to car manufacturers as well to car workshops. The following events occur for the year ended 31 July 2021.

1. Mr Roxy withdrew $1000 cash to pay for his summer holiday in Tasmania.
2. Mr. Roxy paid $12,000 rent for his business premises but the accountant mistakenly posts this transaction to cost of sales.

Required

Explain how events (i) and (ii) will affect the statement of financial position and statement of financial performance for the year ended 31 July 2021.

Use the box below for your answers for parts (i) and (ii).