Stalla is a sole trader who sells on credit. She maintains a provision for doubtful debts at 4% of trade receivables. Stalla's trade receivables were: At 31 December 2021: $75000 At 31 December 2022: $77000 Stalla charges depreciation at 25% per annum, using the reducing balance method. She charges a full year's depreciation in the year a vehicle is purchased and none in the year it is sold. On 31 December 2022, Stalla sold a vehicle for $9500. The vehicle had cost $16000 on 1 September 2020. The balances on Stalla's ledger accounts at 1 January 2022 included the following. Motor vehicles: $48000 Provision for depreciation on motor vehicles: $21000 Stalla had an extension to her retail premises built during 2023. The extension will be used as an office.

1. (a)(i)Prepare Stalla's provision for doubtful debts account for the year ended 31 December 2022. Balance the account at 31 December 2022 and bring down the balance at 1 January 2023.[3]
2. (a)(ii)State two reasons why Stalla maintains a provision for doubtful debts.[2]
3. (b)Calculate the gain or loss on disposal of the vehicle.[4]
4. (c)(i)Prepare Stalla's motor vehicles account for the year ended 31 December 2022. Balance the account at 31 December 2022 and bring down the balance at 1 January 2023.[2]
5. (c)(ii)Prepare Stalla's provision for depreciation on motor vehicles account for the year ended 31 December 2022. Balance the account at 31 December 2022 and bring down the balance at 1 January 2023.[5]
6. (d)Place a tick (✔) in the correct box below to indicate whether each cost is capital expenditure or revenue expenditure. Legal fees for obtaining permission to build the extension Building costs for the extension Insurance for the office Painting the office extension Office calendar for 2023 Purchase of office equipment Installation of office equipment Stationery for office[4]