Section 2 [60 marks] Question 1 is compulsory. Then choose any two 1 The following Trial Balance relates to Ms Mona for the year ending 31st December 2019: DR CR 27,481 Capital 4,140 Drawings 27,000 Premises 3,750 3.114 Trade receivables & Payables 5,550 Inventory at 1 January 2019 2,640 Wages 1,095 Carriage inwards 1,170 Carriage outwards 1,395 Rates & Insurance 51,000 72.593 Purchases & Sales 390 720 Returns inwards and Outwards 521 Advertising 120 Bad debts 480 Rent receivable 3,000 Office equipment at cost 2 . Fistires and fittings 1350 words VIEW Be careful--files from the Internet can contain vituses. Unless you need to edit it's safer to stay in Protected View. ings Review View Kohder Help Fixtures and fittings Enable Editing Provision for depreciation: 9,000 Office equipment Fixtures and fittings 600 Cash 2,400 510 Bank 3,744 Provision for bad debts 150 Total 111,282 111,282 The following additional information is available relating to Ms Mona: 1. Inventory on 31 December 2019 6,300 2. Salaries due but yet to be paid 900 3. Rates and insurance prepaid 155 4. The provision for bad/doubtful debts is maintained at 5% of accounts receivables. 5. Depreciation is to be provided as follows: Office equipment 10% using a straight-line method, Shop fitting 5% using reducing balance method Required: Prepare an income statement for Ms Mona for the year ending 31st December 2019 and Statement of Financial Position as at that date. Explain why a business may create a provision for doubtful debts. 1350 words 6C Mos