The 31 December 2021 audit of Mitchell Ltd, a manufacturer and supplier of chemical products, is nearing completion. The audit team has completed testing of year-end balances and is now reviewing events subsequent to year-end. The audit assistant has reviewed the minutes of directors' meetings and has noted the following: 1) On 12 January 2022 Mitchell entered into a new contract to supply bulk petrochemicals to Valley Petroleum, a retailer of petrochemical products. The contract was similar in nature to other contracts previously negotiated. 2) On 20 December 2021 a chemical leak occurred in the company's main storage facility. The leak was brought under control quickly, but a number of employees complained of nausea and were treated on the spot for problems associated with the inhalation of fumes. Two of the employees treated have been on sick leave since the incident and have now lodged a claim for workers' compensation. The claim was lodged on 20 January 2022 alleging permanent incapacity for work. The company does not believe its employees have a valid claim. Required: For each of the events noted above: a) Discuss the accounting treatments on the 2021 financial reports. b) Discuss the relevant audit evidence should be obtained regarding each of the events. (8 marks) (6 marks)