Natalie and her parents, Janet and Brian, are anxious to examine and analyze the updated financial statements.

Natalie has obtained a copy of the financial statements of a major competitor, a public company, and has been able to determine a number of their ratios: the current ratio is 2:1, the gross profit margin is 75%, and the profit margin is 15%.

The following information represents additional adjustment data that must be recorded to enable the preparation of Koebel's year-end financial statements. Koebel's uses a perpetual inventory system.

1. The physical count of inventory indicates $18,000 on hand at June 30.

2. Of the bank loan payable, $7,500 is to be paid in the next year; the remainder is non-current.

3. Of the mortgage payable, $5,000 is to be paid in the next year; the remainder is non-current.

4. Natalie estimates that an additional $937 of corporate income tax is owed at June 30.

Instructions

(a) Record any required adjusting entries from the above data.

(b) Post to T accounts updated in Chapter 4.

(c) Prepare an adjusted trial balance at June 30.

(d) Prepare a multiple-step income statement for the year ended June 30.

(e) Calculate the ending retained earnings for the year.

(f) Prepare a statement of financial position as at June 30.

(g) Calculate the current ratio, gross profit margin, and profit margin for the year. Compared with Koebel's major competitor, are Koebel's Family Bakery's ratios better or worse than their competitor? Why do you expect there is a difference between Koebel's Family Bakery's ratios and those of its major competitor?