The Crafty Limited is a small Arts & Crafts company. It had been highly profitable for a number of years and its growth had been quite remarkable. The Chairman and Managing Director, Helen Roger, had always been meticulous in supervising all company activities, but over recent years she has been finding it increasingly difficult to maintain day$-$to$-$day control. Helen has been careful to minimise the companys administrative costs. The annual financial accounts had always confirmed her intuitions about the companys progress, so there seemed to be no need for more frequent reporting. However, because of the recent high inflation and cost of living crisis, The Crafty Ltd has been finding it very difficult to win new contracts. It is company policy to depreciate all company vehicles at $20\%$ per annum on a reduced$-$balance basis. The companys premises are listed buildings, and accordingly, there are restrictions on refurbishment. Helen had noticed deterioration, and she was relieved that these buildings are depreciated annually at $1\%$ on a straight$-$line basis. Helen has explored various ways to improve the sales of the company, and the Marketing Manager, Tina Hughes also outlined a number of ideas. Tina is proposing to start an online service for the local community; according to her business plan, the sales revenue would increase by $20\%.$ However, Tina estimates that there will be an initial cost of $50,000,$ and operating costs will increase by $5\%.$ Her second proposal is to allow discounts to students, which she forecasts will yield a $2\%$ increase in revenue, after any additional costs. However, Helen is not convinced that providing service directly to students will increase the revenue. Helen is looking to approach local companies in an effort to promote her business. Helen decides to review the financial position of the company before making any decisions about future plans, and the company accountant prepare the Trial Balance for $31$ March $2023($see over$).$Trial Balance for The Crafty for the year ended $31$ March $2023$ Sales$385,000$ Sales returns$22,000$ Premises : cost$220,000$ : opening cumulative depreciation$5,500$ Vehicle : cost$132,000$ : opening cumulative depreciation$13,200$ Purchases$121,000$ Purchase returns$11,000$ Light and heat$16,500$ Rent$16,500$ Bank$110,000$ Insurance$6,600$ Trade debtors$16,500$ Bad debts written off during the year$4,400$ Bad debt provision $(1$ April $2022)275$ Trade Creditors$22,000$ Loan interest paid$5,500$ Long term loan$121,000$ Capital $205,275$Notes$1.$ The vehicles are depreciated at $20\%$ per annum on a reduced$-$balance basis$\mathrm{.}2.$ Premises are depreciated at $1\%$ per annum on a straight$-$line basis$\mathrm{.}3.$ The trade debtors figure of $16,500$ includes the bad debts of $4,400$ and is before any provision. Analysis of the debts shows that additional bad debt of $550$ should be written off$\mathrm{.}4.$ After dealing with $(3)$ the bad debt provision is to be maintained at $5\%$ of debts$\mathrm{.}5.$ Light & heat $1,000$ still has not yet been paid at the year$-$end $31$ March$\mathrm{.}6.$ The tax for the year is $13,250,$ of which $6,600$ was outstanding at $31$ March $2023\mathrm{.}7.$ The above rent is paid for a year in advance on $1$ May $2022\mathrm{.}8.$ On $1$ April $2022,$ there were $100,000$ inventories and on $31$ March $2023$ there were inventories valued $80,000$ unsold. Required:$1.$ Prepare the Income Statement for The Crafty Ltd for the period ended $31$ March $2023(30$ Marks$)2.$ Prepare the Statement of financial position for The Crafty Ltd for the period ended $31$ March $2023(30$ marks$)3.$ Prepare a brief report on the profitability of the business compared to the previous year with some recommendations as to possible courses of future action. Helen has provided the following information about the year ended $31$ March $2022$ to assist with this task.$(40$ marks$)$Sales $330,000$Gross profit$209,000$Total expenses$66,000$Net profit$143,000$ Hint $-$ you may use the following ratios for comparison: Gross profit margin $=$ gross profit $/$ sales x $100$; Net profit margin $=$ net profit $/$ sales x $100$; You may also use percentage changes for comparison.