Q5. Following balances were taken from the ledger of Gulistan & Co. on Dec 31st, 2010 Title of Account Debit Credit Cash 5,000 Accounts Receivables 10,000 Merchandise Inventory (1-1-10) 8,000 Prepaid Rent 5,000 Sales Equipment 30,000 Purchases 24,000 Carriage Inward 500 Advertisement Expenses 2,500 Miscellaneous Expenses 1,500 Office Supplies Expenses 2,000 Delivery Expenses 500 Salaries Expense 18,000 Sales return and allowance 500 Allowance for bad debt Sales Revenue 68,000 Purchases discount 1,000 Commission Income 3,000 Capital 30,000 Accounts Payables 6,000 500 Data for adjustments on December 31st, 2010 i) Prepaid shop rent Rs. 1000 ii) Office supplies unused Rs. 400 iii) Allowance for bad debt was estimated at Rs 500 iv) Accrued salaries Rs. 5000 v) Allowance for depreciation on sales equipment was estimated at Rs. 2000 vi) Merchandise inventory on December 31, 2010 Rs 10,000 vii) Commission Unearned Rs 1000 Required i) Prepare Income statement for the year ended Dec 31, 2010 ii) Prepare Balance sheet as on Dec 31, 2010