At the start of the financial year on 1 January, a business bought a new motor vehicle for $34\,000. By mistake, it was entered in the motor expenses account. Motor vehicles are depreciated by the reducing balance method at $30\%$ per annum. The motor vehicle is expected to have a residual value of $4\,000 at the end of its useful life. If this mistake is left uncorrected, what impact will it have on the profit for the year ended 31 December?
- A$10\,200 overstated
- B$23\,800 understated
- C$25\,000 understated
- D$34\,000 understated