Net impact of adjustments on profit or loss Steps:

• Identify each adjustment's nature (income or expense) and amount.
• Classify as increasing (+) or decreasing (-) profit based on type.
• Sum all: +$400 income, -$63 expense, -$300 expense, +$26 income.
• Net total: $400 -$63 - $300 +$26 = $63 income.

Why the correct option is correct:

• Adjustments to profit or loss are aggregated by net effect, per IAS 1 presentation standards, resulting in $63 net income.

Why the others are wrong:

• A: Ignores income adjustments, only netting expenses.
• C: Treats net as expense, reversing income/expense signs.
• D: Miscalculates total as gross rather than net.

Final answer: B