Question 2 (50 marks) Part I (a) Briefly explain what is meant by the principle of adequate disclosure. (2 mark) (b) Refer to Question 1 of Beauty Forever Company and assume the Company's financial statements were issued on March 31, 2020. State "Yes" or "No" whether situation (1) to (4) below require disclosure with the financial statements. If "Yes", identify the nature of disclosure. If "No", give the reason to support. The following events occurred in Beauty Forever Company: (1) During the year 2019, the Company was sued by a customer for medical compensation of $80,000 for injury as a result of a laser hair removal treatment provided by the Company, The hearing date is fixed on May 5, 2020. (2) The Company adopts straight-line method to calculate the depreciation expense for the equipment. (3) Due to the outbreak of coronavirus disease starting from 19 January 2020, the Company has suspended its operation until the end of March to avoid the spread of disease. (4) A customer is very satisfied with the botox injection procedure provided by the Company and paid $50 tips to the Company in addition to the service fee. (24 marks)