An alphabetical list of Rikard's adjusted accounts at its fiscal year end, August 31, 2014, follows. All accounts have normal balances.

Additional information:
1. Of the notes payable, $6,000 becomes due on February 17, 2015. Th e balance is due in 2016.
2. On July 18, 2014, Rikard invested $3,500 cash in the business.
Instructions
(a) Prepare a multiple-step income statement, statement of owner's equity, and classified balance sheet.
(b) Calculate the gross profit margin and profit margin.

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Accounts payable Accumulated depreciation-equipment Accumulated depreciation-furniture Cash Cost of goods sold Depreciation expense Equipment Furniture Insurance expense Interest expense Interest payable Merchandise inventory $15,500 14,000 17,500 15,450 271,500 7,000 35,000 42,000 3,575 2,100 525 70,350 Notes payable Prepaid insurance R. Smistad, capital R. Smistad, drawings Rent expense Salaries expense Salaries payable Sales Sales returns and allowances Supplies Supplies expense Unearned sales revenue $42,000 575 65,750 80,000 24,000 50,000 2,250 465,000 16,300 950 6,325 2,600