A-LevelAccountingPreparation of financial statements9706/12 · May/June 2025 · Q161 Mark
After preparing the financial statements of a sole trader, the following items were discovered. 1 Drawings consisted of goods taken for own use at their sales value of $12000. The owner applies a mark-up of 50% on all goods sold. 2 Profit for the year included an insurance expense of $7500. One-third was for the owner's health insurance. What is the effect on the profit for the year after correcting these items?
A$1500 decrease
B$3500 decrease
C$6500 increase
D$8500 increase
✓ Correct answer
A: $1500 decrease
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