Q2. Following is the pre-closing trial balance of ARK & Co on December 31st, 2001 Title of Account Debit Credit 28,000 43,200 36,000 14,400 180,000 36,000 28,800 188,280 Cash Accounts Receivables Merchandise Inventory (1-1-03) Prepaid Insurance Office Equipment Allowance for Depreciation Accounts Payables Capital Drawings Sales Sales Discount Purchases Purchases return and allowance Transportation In Advertisement Expense Salaries Expense Commission Income 21,600 288,000 14,400 144,000 18,000 20,880 30,600 36,000 569,080 10,000 569,080 Data for adjustments on December 31st, 2003 i) Insurance unexpired Rs. 5400 ii) Allowance for depreciation on equipment Rs 7200 iii) Accrued salaries Rs. 4000 iv) Advertisement expense for the year was Rs. 26280 v) Make allowance for doubtful debts at 10% of accounts receivables at the end of the year vi) Merchandise inventory on December 31, 2003 Rs 54,000 vii) Commission income for the year was Rs. 7000 and accrued commission income was Rs 8500 Required i) Prepare Income statement for the year ended Dec 31, 2001 ii) Prepare Balance sheet as on Dec 31, 2001