The following Trial balance was extracted from the book Gulzar Traders on 31st

December, 2007. You are required to prepare income statement for the year ended 31st

December, 2007 and a Balance Sheet as at that date:

Adjustments:

1. Closing stock is valued at Rs. 19,000.

2. Interest accrued on Investment is Rs. 840.

3. Bad debts reserve is to be maintained at Rs.2,000.

4. Depreciate furniture at 10%.

5. Insurance prepaid is Rs. 200.

6. There is a contingent liability of Rs. 1,000
 

Debit Balance Stock on (1st January, 2007) Purchases Bills Receivable Cash in hand Returns Furniture Office Expense Bad Debts Drawings Sundry Debtors Investment Insurance Telephone Expenses Total Rs. Credit Balance 13,000 Bad Debts provision 49,000 Discount Received 12,000 Bank Overdraft at 15% 6,000 Sales 5,000 Returns 2,400 Creditors 7,800 Bills payable 2,000 Capital 5,600 20,000 16,000 2,000 2,200 143,000 Total Rs. 4,000 2,600 8,000 61,000 9,000 7,400 11,000 40,000 143,000