The draft accounts for the year ended 30 June 2016 and a balance sheet as at that date for S. Steiner are submitted to you. Towards the end of the financial year her accountant resigned and she had completed the records herself. She thinks that errors have occurred and asks your help. An examination of the accounting records reveals the following:

1. Interest of $1920 on the investments held by the business was due, but has not been received.

2. A payment of $4160 for new office furniture has been incorrectly debited to the Sundry Expenses account. The furniture had been purchased late in June 2016.

3. Rent due from customers Raggatt and Petney amounting to $2560 is not included in the accounts.

4. Repairs to Steiner’s private motor vehicle, $1700, have been debited to the Vehicle Expenses account.

5. Commission due to sales representatives for the month of June, $4480, has been overlooked.

6. An insurance policy covering contents and buildings was taken out on 1 March 2016, the annual premium of $2400 being paid in advance on this date and debited to the Prepaid Insurance account.

7. A payment of $35 000 on 1 July 2015 for additions to buildings has been debited to Repairs and Maintenance.

8. No depreciation has been recognised for the year ending 30 June. The draft balance sheet shows the following:

Buildings (at cost) Accumulated depreciation	$	256 000* 51 200		$	204 800
Office furniture and equipment (at cost)* Accumulated depreciation		33 600    20 800			12 800
* Does not include additions to buildings in no. (7), nor adjustments for office furniture in (2) above.

Depreciation is to be calculated as follows:

Buildings: 2% on cost

Office furniture and equipment: 20% on cost.

Required

A. Ignoring GST, show the journal entries required to make the necessary adjustments.

B. Calculate the effect (increase or decrease) of each of the adjustments on the profit figure of $64 900 as shown in the draft accounts.