Question - After the accountant of Stallone Retailers had prepared the financial statements for the year ended 31 December Year 6, the following errors came to light:
1. A motor van purchased for £8,000 during the year had been charged to motor running expenses. The motor van should be charged with depreciation at the rate of 20 per cent of cost.
2. Closing inventories, which had been used in calculating gross profit had been overvalued by £3,000.
3. The owner had withdrawn £4,000 from the business in the form of goods acquired for resale, which had not been recorded.
4. An interest-free loan of £2,200 from a relative of the owner was repaid during the year but this was not recorded.
The profit for the year before these errors were discovered was £112,000
What is the profit for the year after adjusting for these errors?
A. £119,400
B. £117,200
C. £123,200
D. £111,400