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Question 1 The following balances were extracted for the books of James St Patrick at the end of September 2019 Particulars DR (S) CR(S) 250,000 85,000 17,000 125,000 34,000 65,000 2,000 90,500 1,600 4,500 3,700 2,600 4,200 5,000 Sales Fixtures and Fittings Provision for depreciation - Fixtures Motor Vehicle Provision for depreciation - Motor Vehicle Accounts Receivable Capital Discounts Provision for bad debts Carriage Inwards Return Inwards Return Outwards Carriage Outwards Accounts Payable Purchases Interest Income Received Wages Drawings Stock at October 1, 2018 Bank Cash in hand Commission Received Bad Debts Insurance Water Rates Loan (due 2025) 30,000 170,500 35,000 30,500 7,600 21,500 25,000 4,400 21,000 5,500 3,000 5,200 23,700 536,500 536,500 Notes a) Wages accrued amounted to $5,000, insurance prepaid amounted to $600. b) The provision for bad debt is to be adjusted to 5% of the accounts receivable c) Stock at September 31, 2019 was $15,300 d) Depreciation rates are as follows: i. Fixtures and Fittings -- 10% per annum on the straight line basis ii. Motor Vehicle 15% on the reducing balance basis e) Commission received prepaid amounted to $3,500 1) Mr St Patrick is paid interest income amounting to $3,000 per month for the year ended September 30, 2019. Required: a) Prepare James St Patrick's Statement of Profit or Loss with the appropriate headings (25 marks) b) Prepare James St Patrick's Statement of Financial Position with the appropriate headings (15 marks) c) James is upset that the accountant has recorded a provision for doubtful debts in the accounts. Explain to him, making references to two (2) accounting concepts why it is appropriate for the accountant to do so