E. FINANCIAL STATEMENTS (15 Marks) Presented below is the adjusted trial balance of Karen's Pet Supplies as at its fiscal year end, June 30. 2071, All accounts are their normal balance (debit or credit). Karen's uses the perpetual inventory system Accounts payable.. $ 34,850 K. Milani, capital ...we $ 50,770 Accounts receivable.. 27,300 K. Milani, drawings . 24,000 14,000 Accum, depreciation, computers... 1.500 Long-term note receivable . $5,000 Accum, depreciation, equipment 32,000 Merchandise inventory cash.. Note payable, due 2022 ..... 47,000 9,500 Computers.... 4,500 Prepaid rent..... 1,500 Cost of goods sold. 195,000 Rent expense. 14,000 Depreciation expense 4,000 Salaries expense 50,000 Equipment..... Insurance expense 80,000 Salaries payable . 6,200 8,400 Sales discounts 100 Interest expense Interest payable. 2,350 Sales returns and allowances ...... 1,000 Interest revenue.. 280 Sales revenue. 320,000 700 Supplies.... 900 Supplies expense .... 1,750 Instructions a) Prepare a multiple-step income statement. (12 marks) Calculate Karen's gross profit margin. Karen's gross profit margin for 2020 was 45%. Comment on the change in gross profit margin from the prior year. (3 marks) Answer part a on next page e