XYZ Ltd. discovered that an extra capital of $12,000 paid into the bank had been credited to the Sales account. Goods taken for own use worth $600 had been debited to General Expenses. Private insurance of $110 had been debited to the Insurance account. A purchase of goods from D. Lee for $750 was entered in the books as $705. Cash banked of $420 was credited to the bank column and debited to the cash column in the cash book. Cash drawings of $350 had been credited to the bank column of the cash book. Returns inwards of $130 from R. Kumar had been entered in error in S. Sharma’s account. A sale of equipment for $2,000 had been credited to Office Expenses.
Requirement: Provide the necessary journal entries to rectify these errors and explain the impact on the financial statements.