Could you please explain how the answer of £53,600 was obtained and why Borgen Ltd prepared draft financial statements for the most recent year, which reported a profit for the year of £60,000. A subsequent check of the financialstatements found the following errors:1. Directors' salaries of £55,000 had been treated as rent payable.2.Routine repairs to a machine for £4,000 had been added to the cost of the machine and had been depreciated at the rate of25 per cent on cost.3.A dividend paid of £10,000 had been reported as a dividend paid of £1,000.4. A bad debt of £5,000 had not been recognised.The company pays corporation tax of 20 per cent on reported profits before tax.Required:What will be the profit for the year after the above errors have been corrected?£53,600 (Type an integer.)

Step 1:First, understand all the given errors and there impact on profit: 1. The director's salary…

Answered: Borgen Ltd prepared draft financial…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

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Chapter14: Corporation Accounting

Section: Chapter Questions

Problem 20EB: Trumpet and Trombone Manufacturing, Inc. began the year with a retained earnings balance of...

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