The following is the Trial Balance of Baceloma Plc as at 31 December 2021: K K Research & Development Costs 50 000 Inventory at 31 December 2021 32 900 Trade Payables 46 700 Cost of sales 310 840 Bank 30 150 Administrative expenses 26 045 Non Current Assets -Carrying Amounts (Note 4) 930 000 Trade Receivables 72 500 Investments in equity shares 150 000 Share premium 50 000 Deferred Tax 30 500 K1.50 Equity shares 300 000 Income Tax 4 265 Sales 820 000 Revaluation reserve 100 000 Retained earnings 285 400 Distribution costs 25 900 Total 1 632 600 1 632 600 ADDITIONAL INFORMATION: 1. The estimated income tax on current years profits is K 10 million. The provision for deferred tax should be K27 500 at the end of the year. The income tax balance in the trial balance is an under-provision of tax relating to the preceding year. 2. The total inventory includes an item of inventory that cost K 25 000 and can be sold for K 22 000 and only after incurring selling costs of K 6 000. 3. The investment in equity shares are not traded on a stock exchange. They are held to maturity but have a 70% probability of being sold to a targeted buyer. 4. Schedule of Non current Assets: Land & Buildings (K) Plant & Machinery (K) Development Costs (K) TOTAL (K) Cost 800,000 200,000 180,000 1,180,000 Accumulated Depreciation/Amortization On 1 January 2021 150,000 80,000 20,000 250,000 Carrying Amount 650,000 120,000 160,000 930,000 5. Land and Buildings include land with a carrying amount of K200,000. A professional valuer has advised directors that the land has a market value of K260,000. Buildings have a life of 50 years with no scrap value. Depreciation of buildings is treated as an administration expense. 6. In preceding years depreciation of plant was done on a straight line at 10% per annum. The directors now realise that Plant and Machinery should be depreciated at 20% using the reducing balance method. Depreciation of plant and equipment is taken to Cost of sales. 7. Research and development expenditure is made up of the following: Expenditure of K 25 000 is on a project that has since been abandoned because its viability uncertain. Capitalised amounts for this project amount to K35, 000. Research expenditure in the year is K 12 000. The balance of the amount spent relate to on-going viable projects. 8. One project was completed two years ago at a of cost K50 000. It had a life of 5 years, and only 3 years are remaining. 9. Barceloma made a rights issue of shares of 2 for every 5 held, after which a bonus issue of shares was made of 1 for every 10 shares held. Required: ( a ) To explain the terms Recognition and Measurement as are discussed in the IASBs Conceptual Framework for the preparation of Financial Statements (2018) ( 8 marks) ( b ) To prepare the Statement of Profit or loss and Other Comprehensive Income for the year ended 31 December 2021 using the provided answer formats ( 12 marks) ( c ) To prepare the Statement of Changes in Equity as at 31 December 2021 ( 5 marks) ( d ) To prepare the Statement of Financial Position as at 31 December 2021 ( 10 marks)