Shiv is a trader. His financial year ends on 31 August. He does not maintain a full set of accounting records but was able to provide the following information for the year ended 31 August 2021. Total revenue $320000 Mark-up 25% Bank account summary for the year ended 31 August 2021 $ $ Balance b/d 49000 Expenses 34000 Cash sales 3700 Drawings 4200 Receipts from trade receivables 312400 Payments to trade payables 257 700 Equipment 16000 Balance c/d 53200 365 100 365 100 Assets and liabilities 1 September 2020 31 August 2021 $ $ Inventory at cost 23500 ? Trade receivables 22000 25900 Expenses owing 400 Trade payables 32600 29600 Equipment at net book value 12800 Premises at cost 90 000 90 000 Shiv had withdrawn $900 for a family holiday during the year. He had included this in the expenses. On 31 August 2021 Shiv decided to create a provision for doubtful debts of 3% of trade receivables. REQUIRED

1. (a)Calculate the purchases for the year ended 31 August 2021.[3]
2. (b)Prepare the income statement for the year ended 31 August 2021. The inventory on 31 August 2021 should be clearly shown within the statement. Shiv Income Statement for the year ended 31 August 2021 $ $[11]
3. (c)Name the accounting principle Shiv should apply when recording the $900 he had used for a family holiday.[1]
4. (d)Discuss the implications of Shiv valuing the inventory on 31 August 2021 at selling price.[5]