A company's draft profit is $50,000. It is discovered that closing inventory was overstated by $5,000, and a depreciation charge of $2,000 was omitted. What is the revised profit?

Closing inventory reduces cost of sales, thereby increasing profit. If it is overstated by $5,000, profit is overstated by $5,000 and must be reduced. Omitting an expense (depreciation of $2,000) also overstates profit. Revised profit = $50,000 - $5,000 - $2,000 = $43,000.