Once the financial statements of a sole trader had been prepared, the items below were identified. 1. Drawings were goods removed for personal use, valued at their sales value of $12 000. The owner uses a mark-up of 50% on all goods sold. 2. Profit for the year included an insurance expense of $7500. One-third of this related to the owner’s health insurance. What is the effect on the profit for the year after these items are corrected?
- A$1500 decrease
- B$3500 decrease
- C$6500 increase
- D$8500 increase