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 2021. All accounts are their normal balance (debit or credit). Karen's uses the perpetual inventory system Accounts payable... Accounts receivable..... Accum, depreciation, computers. Accum. depreciation, equipment Cash- Computers... Cost of goods sold. Depreciation expense Equipment.. Insurance expense Interest expense.. Interest payable.. Interest revenue... $ 34,850 27,300 1,500 32,000 9,500 4,500 195,000 4,000 80,000 8,400 2,350 280 700 K. Milani, capital...... K Milani, drawings... Long-term note receivable.. Merchandise inventory... Note payable, due 2022... Prepaid rent..... Rent expense... Salaries expense. Salaries payable... Sales discounts.. Sales returns and allowances. Sales revenue...... Supplies... Supplies expense.... $ 50,770 24,000 14,000 55,000 47,000 1,500 14,000 50,000 6,200 100 1,000 320,000 900 1,750 Instructions a) Prepare a multiple-step income statement. (12 marks) b) 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