Pussy Willow Ltd. has the following trial balance at 31 December 2018 Debir Credit ash and bank 100 Interest expense 65 800 10,000 caumlated de iation at I Januar Motor vehicles 120 uary 2018 Purchases Carriage inwards 4,100 1 00 Sales discounts Dividends paid 200 Sales tax payable rade payables 90 1,050 El ordinary shares 1,800 Suspense accounts are opened either to correct errors or when it is not known immediately where to post an amount. A suspense account is temporary and will be closed once it has become clear which account should be correctly posted by the given amount. The following additional information is relevant: a) Inventory as at 31 December 2018 was valued at 1,800,000 b) Depreciation has to be provided as follows i. ii. Buildings at 5% straight-line, charged to administrative expenses Plant and equipment at 20% on the reducing balance basis, charged to cost of sales Motor vehicles at 25% on the reducing balance basis, charged to distribution costs iii. (c) A customer has gone bankrupt owing 76,000. This debt is not expected to boe received and has to be written off. In addition, it has been decided to set up a provision for doubtful debts of 5% of the receivables at the year-end. 2018. On that date the proceeds were debited to the cash and bank account and credited to the suspense account. d) million new ordinary shares were issued at 1.50 per share on 1 December e Land was revalued as a 31 December 2018 at 1,200,000 Reguired 1. Prepare the following Statement of profit or loss and the statement comprehensive income for the year ended 31 December 2018 (you may choose to prepare two separate statements or one statement that combines the two) a. b. Statement of changes in equity for the year ended 31 December 2018 c. Statement of financial position as at 31 December 2018 Provide all the financial statements with proper headings. Show all your workings. Ignore taxation. 2. Explain which accounting concept justifies setting up a provision for doubtful debts -see (c) above. 3. Explain why Pussy Willow Ltd. might have chosen to revalue their land rather than continuing to show it at cost. Why should they carry out subsequent revaluations on a regular basis (at least at the end of each financial year) from now on