You are given the following information: 1. Inventory at 31 December 2022 cost $47,000. Included in this inventory are items which cost $1,400 which are now obsolete and are expected to be sold for $200. The balances below have been extracted from the accounting records of Ferrell Ltd at 31 December 2022: You are given the following information: 1. Inventory at 31 December 2022 cost $47,000. Included in this inventory are items which cost $1,400 which are now obsolete and are expected to be sold for $200. 2. The land and buildings, at valuation, comprise: land $80,000, buildings $60,000. The land is to be revalued to $250,000. 3. Prepaid insurance at 31 December 2022 is $1,700 while accnued electricity, at that date, is $5,500. 4. An item of plant and machinery, the cost of which had been $5,000 and whose net book value was $2,300, had been sold in the year for $1,000. No accounting entries relating to the disposal have been made in the company's books of account other than in relation to the disposal proceeds. 5. Depreciation on fixed assets is to be charged as follows: frechold land: no depreciation is charged buildings: 1% per annum on a straight-line basis plant \& machinery: 30% per annum on a reducing balance basis 6. A bad debt of $3,000 is to be written off. 7. The provision for bad debts is to be revised to 4% of trade receivables. 8. A final dividend of 3c per ordinary share is to be proposed by the directors. 9. The dividend on the cumulative preference shares, due to be paid on I January 2023 is to be provided. 10. Corporation Tax of $20,000 on the current year's profits is to be provided. 11. Interest on the debentures due to be paid on 1 January 2023 is to be provided. Required: (a) Prepare an income statement for the year ended 31 December 2022, a statement of financial position at that date, and a statement of movements in equity note for 2022 , all in good style, for the directors. (25marks) (b) A company is required to disclose its accounting policies in its published accounts. Define 'Accounting Policy', give an example in relation to Ferrell Ltd, and explain why you believe such disclosure is required. (5 marks) You are given the following information: 1. Inventory at 31 December 2022 cost $47,000. Included in this inventory are items which cost $1,400 which are now obsolete and are expected to be sold for $200. The balances below have been extracted from the accounting records of Ferrell Ltd at 31 December 2022: You are given the following information: 1. Inventory at 31 December 2022 cost $47,000. Included in this inventory are items which cost $1,400 which are now obsolete and are expected to be sold for $200. 2. The land and buildings, at valuation, comprise: land $80,000, buildings $60,000. The land is to be revalued to $250,000. 3. Prepaid insurance at 31 December 2022 is $1,700 while accnued electricity, at that date, is $5,500. 4. An item of plant and machinery, the cost of which had been $5,000 and whose net book value was $2,300, had been sold in the year for $1,000. No accounting entries relating to the disposal have been made in the company's books of account other than in relation to the disposal proceeds. 5. Depreciation on fixed assets is to be charged as follows: frechold land: no depreciation is charged buildings: 1% per annum on a straight-line basis plant \& machinery: 30% per annum on a reducing balance basis 6. A bad debt of $3,000 is to be written off. 7. The provision for bad debts is to be revised to 4% of trade receivables. 8. A final dividend of 3c per ordinary share is to be proposed by the directors. 9. The dividend on the cumulative preference shares, due to be paid on I January 2023 is to be provided. 10. Corporation Tax of $20,000 on the current year's profits is to be provided. 11. Interest on the debentures due to be paid on 1 January 2023 is to be provided. Required: (a) Prepare an income statement for the year ended 31 December 2022, a statement of financial position at that date, and a statement of movements in equity note for 2022 , all in good style, for the directors. (25marks) (b) A company is required to disclose its accounting policies in its published accounts. Define 'Accounting Policy', give an example in relation to Ferrell Ltd, and explain why you believe such disclosure is required