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Net profit was calculated as being $10,200. It was later discovered that capital expenditure of $3,000 had been treated as revenue expenditure, and revenue receipts of $1,400 had been treated as capital receipts.
What is the net profit after correcting this error?
In this question, It’s impossible to get the right answer because revenue receipts contains cost + profit from which we cant get profit figure…
Capital receipts is cash received from the sale of non-current assets.
The question is not impossible. The profit statement should only contain revenue receipts and revenue expenditure.
So the capital expenditure should be removed from the profit statement because it should not be there – this increases the profit.
The revenue recipes should be included – this will also increase the profit.
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