A company's income statement for the year ended 31 December 20X5 showed a net profit of $49,200 . It was later found that $85,800 . paid for the purchase of a motor van had been debited to the motor expenses account. It is the company's policy to depreciate moter vans at 25% per year on the straight line basis, with a full year's charge in the year of acquisition. What would be the net profit be after adjusting for this error?
Suggested solutions
| Net Profit | 49,200 |
| Add motor van expenses (wrongly deducted ) | 85,800 |
| Less Depreciation expenses for the motor van (25% straightline basis) | 21,450 |
| Answer | 113,550 |
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