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2021 SECTION 'C' (DETAILED-ANSWER QUESTIONS) Marks: 20 Note Attempt the following questions which is compulsory Q7: The following balances taken from the pre-closing trial balance of Raza Traders as on December 31, 2020: Cash Rs.42,000, Accounts Receivable Rs.48,000, Merchandise Inventory (01-01-20) Rs. 18,000, Furniture Rs. 130.000 Allowance for depreciation-furniture Rs. 13,000, Accounts Payable Rs. 17.000, Capital Raza Rs. 160,000, Sales Rs 210.000, Purchases Rs. 106.000, Prepaid Insurance Rs. 16,000. Salaries Expense 20,000, Sales returns Rs. 10,000, Drawing-Raza Rs. 10,000. Supplementary data for adjustments: 1. Salaries outstanding Rs.4,000 2. Insurance unexpired Rs.10,000 3. 10% Depreciation was estimated on furniture 4. Provide bad debts @ 2% of net sales. 5. Merchandise Inventory on Dec. 31 Rs. 14,000 Required: Prepare any two of the following a Adjusting Entries b) Income Statement C) Balance Sheet