An employee got injured in a company while operating a machine. He sued the the company alleging that the injury happened because of insufficient safety measures and he claimed a compensation of $$55,000.$ The company$$s solicitors have stated that they believe that the claim is unlikely to succeed. The legal cost to the company is likely to be $$5,000$ and will be incurred regardless of whether or not claim is successful. How should these items be treated in the financial statements of the factory?

a$.$ Provision should be made for $$55,000$ and the legal costs should be disclosed by note.

b$.$ Provision should be made for $$55,000.$

c$.$ No provision should be made and both items should be disclosed by note.

d$.$ Provision should be made for $$5,000$ and the compensation of $$55,000$ should be disclosed by note