You are given the following information relating to Lamb Ltd Trial balance as at 31 December 2020 as follows: DR E Inventory as at 1January 25.000 staff expenses 160.000 Revenue 500,000 Freight in 2.500 lease expenses 18,465 Electricity 20,005 Purchases 300,000 Account Receivables 85,000 Account Payables 55,000 Machinery at cost 250,000 Computers at cost 100,000 Machinery: Accumulated 88,500 Depreciation at 1 January Computers: Accumulated Depreciation at 1 January 55.600 Retained Earnings as at 1 January 35,000 Bank Uneamed rent 5,000 58,870 Bad debt expenses Allowance for doubtful debts as at 1 January Share Capital Additional paid in capital Total 12,000 5,000 200,000 50,000 1,012,970 1,012,970 Retained Earnings as at 1 January Bank Unearned rent Bad debt expenses Allowance for doubtful debts as at 1 January Share Capital Additional paid in capital Total Additional information: 35,000 5.000 58.870 12,000 5,000 200,000 50,000 1,012.970 1,012,970 The inventory was counted as at 31 December 2020 and was valued at 25,000 Electricity incurred for which no invoices have yet been received amount to a total of 2.000. The allowance for doubtful debts is to be set at 3 per cent of accounts receivable. The amount shown for lease on the trial balance includes a payment of 8,000, which represents twelve months' rent to 31 May 2021. Unearned rent has a balance of 5,000 which was earned by the end of December 2020. Depreciation is to be applied at the following rates: Machinery: (reducing balance) 20% Computers: (straight-line) 20% Required: Prepare the following financial statements for Lamb Ltd business: 1.An income statement for the year ended 31 December 2020. (11.5 Marks) 2.A balance sheet as at 31 December 2020. (13.5 Marks) 3. Read the financial statements prepared above and interpret your findings