FINANCIAL STATEMENT

M/s. Iqbal Co. Ltd is registered with an authorized capital of Rs. 1,000,000 divided into each stock of Rs. 10 each. The following is the pre-closing trial balance of M/s. Iqbal Co. Ltd for the period ended December 31, 2007:

	Dr.	Cr.
Cash	40,000
A/c. Receivable	28,000
Office supplies	1,000
Sales		357,000
Purchase Return		3,000
Plant Assets	3,92,000
Accumulated dep. (Plant Assets)		50,000
A/c. Payable		27,000
Merchandise (1-1-2007)	25,000
Purchases	125,000
Transportation-in	20,000
Sales Discount	5,000
Salaries Expense	25,000
Auditors Fees Expense	6,000
Rent Expenses	4,000
Paid Up Capital		130,000
Retain Earnings		70,000
10% Note Payable		44,000
Prepaid Insurance	10,000
Total	681,000	681,000

Data for Adjustment for the period ended December 31, 2007

Inventory at December 31^st, valued Rs. 10,000.

Estimated depreciation Rs. 10,000 for the year.

Office supplies on hand at the end of the year Rs. 700

Accrued interest on note payable

Salaries due amounted to Rs. 2,000

Declared cash dividend 5% on paid up capital

40% corporate tax

Required

Income statement for the year ended December 31,2007.

Statement of Retain Earnings and balance sheet for the year ended December 31,2007.