Question 12 - 9706/13/M/J/25

Correcting profit for accounting errors Steps:

Omitted wages $9,000 mean expenses understated, so subtract$ 9,000 from draft profit.
Discounts received $2, 500 o m i t t e d t o d i s c o u n t s a l l o w e d a c c o u n t i s a m b i g u o u s; s t a n d a r d i n t e r p r e t a t i o n t r e a t s i t a s r e c o r d e d a s e x p e n s e i n s t e a d o f i n c o m e, u n d e r s t a t i n g p r o f i t b y$ 5,000, so add $5,000.
Sales returns $8,000 debited to purchases returns account has net zero effect on profit (sales overstated by$ 8,000, expenses overstated by $8,000).
Net adjustment: $40,000 -$ 9,000 + $5,000 +$ 0 = $36,000.

Not enough information to reach $80,000, as error effects are ambiguous.

Final answer: Not enough information.