Adjusting draft profit for stationery inventory and provision reduction

Steps:

• Draft profit is $4000, which includes full$2400 stationery as expense since purchase entered but inventory not adjusted.
• Used stationery: 1/6 × $2400 =$400; closing inventory $2000 added back to reduce expense.
• Provision reduction $390 not entered; add$390 as credit to income statement.
• Corrected profit: $4000 +$2000 + $390 =$6390.

Why B is correct:

• B applies the matching principle, deferring unused costs to inventory (asset) and crediting provision decrease to profit per accrual accounting.

Why the others are wrong:

• A: Adds inventory but only partial provision reduction ($190 instead of$390).
• C: Adds full $2400 as if all inventory, ignoring used portion expense.
• D: Adds full $2400 plus minimal provision adjustment ($30).

Final answer: B