Adjusting profit for discount misclassification and receipt error

Steps:

• Error 1: Cheque receipt of $325 only in cash book means debtors overstated, but this balance sheet error does not impact profit.
• Error 2: Discount allowed $300 wrongly credited to discount received account, creating fictitious income (+$300) and omitting expense (+600.
• Original profit of $6300 is reduced by$600 from error 2.
• Correct profit = $6300 -$600 = $5700.

Why C is correct:

• Matches $5700 after deducting$600 overstatement from misposting discount allowed as received, per double-entry principle.

Why the others are wrong:

• A. $2450: Subtracts excessive unrelated amounts, ignoring proper error impacts.
• B. $2750: Likely subtracts$325 twice and half of error 2, misapplying adjustments.
• D. $6000: Corrects only the income side of error 2 ($300), omitting the missing expense.

Final answer: C