On 1 January, the owner of a business bought a new machine. All non-current assets are depreciated at 25% per annum. Over the year, the following payments were made for the machine: cost of machine $16\,000 delivery $400 installation $600 one year’s insurance $100 A charge of $5100 for these items was entered in the draft statement of profit or loss for the year ended 31 December. Calculate the amount by which the draft profit for the year was understated.
- A$300
- B$450
- C$750
- D$850