Bilal ahmed Itd has an issued capital of Rs.5,000,000 divided into ordinary shares of Rs.10 each. The authorized capital is 1000,000 ordinary shares of Rs.10 each. Following is the company's trial balance as on December 31, 2004: Sales Purchases Debenture interest Director's remuneration Selling and distribution expenses General expenses Ordinary share capital Share premium 5% Debentures Plant & machinery cost Motor van at cost Accumulated dep.Plant & machine Accumulated dep Motor. van General reserve Retained earnings Jan. 1,04 Accounts payable Accounts Bank balance Inventory January 1,2004 Interim dividend Additional Information-December 31.2004: (a) Merchandise inventory valued at Rs.80,000, (b) Dividend proposed on ordinary shares at 3%. (c) Audit fees for the year estimated at Rs.5.000. 400,000 2,500 45,000 130,000 143,000 4,700,000 700,000 Style: 190,000 204,500 50,000 25,000 6,590,000 1,000,000 5,000,000 50,000 50,000 140,000 80,000 90,000 120,000 60,000 6,590,000 (d) Provision for depreciation on plant and machinery and motor van is estimated at 10% and 20% per annum respectively. (e) The directors have recommended to transfer Rs.50,000 to general reserve. REQUIRED (a) Income statement for the year ended December 31,2004. (b) Statement of retained earnings. (c) Balance sheet as on December 31,2004 in a classified form.