What is Sparkle’s corrected profit for the year after accounting for the above issues

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The draft profit for Sparkle Ltd (Sparkle) for the year ended 31 December
2020 is £119,200. After the draft profit was calculated, the following issues
were discovered.
• The depreciation rate for cars should have been updated to 20%
straight-line at the start of the year but was calculated using 25%
straight-line basis in error. The balance on the car cost account at the
start of the year was £24,000. There were no additions or disposals of
cars in the year.
• Debts of £5,400 should have been written off as irrecoverable at the
year end, but the journal entry was not posted.
What is Sparkle’s corrected profit for the year after accounting for the above
issues?
a) £113,800
b) £118,000
c) £115,000
d) £112,600

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation
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