Jayani prepared a trial balance at 30 September 2010, which balanced. A draft income statement (trading and profit and loss account) was then prepared and a gross profit of $60 000 and a profit for the year (net profit) of $15 000 was calculated. Jayani then discovered the following errors: 1 A sale of office equipment at net book vaule, $3 000, had been recorded in the sales account. 2 Purchases of goods, $650, on credit from Alana had been credited to the purchases account and debited to Alana's account. 3 An invoice from JGL Insurance, $425, for buildings insurance, had not been recorded in the books.

1. (a)Prepare journal entries to correct the errors in 1 to 3 above. Narratives are not required. Journal Dr Cr[6]
2. (b)Name the type of error made in 1 to 3 above. 1 2 3[3]
3. (c)Calculate the revised gross profit and profit for the year (net profit) for Jayani, following the correction of the errors 1 to 3 above. Where the error would have no effect on the gross profit or profit for the year (net profit), state 'no effect'. Gross profit $ Profit for the year (Net profit) $ Draft profit 60 000 15 000 Error 1 Error 2 Error 3 Revised profit[8]
4. (d)Jayani is considering the purchase of a new computerised book-keeping system. State two benefits that Jayani will gain from using Information and Communications Technology (ICT) in book-keeping. (i) (ii)[2]