$395,000 $ 5,500 3,480 8,980 386,020 OLD EAST COMPANY Income Statement December 31, 2021 Sales Less: Unearned revenue Purchase discounts Total revenue Cost of goods sold Purchases Less: Purchase returns and allowances Net purchases Add: Sales returns and allowances Cost of goods available for sale Add: Freight out Cost of selling merchandise Gross profit margin Operating expenses Freight in Insurance expense Interest expense Rent expense Salaries expense Total operating expenses 232,000 4,000 236,000 7,500 243,500 9,500 253,000 133,020 4,500 10,500 2,500 18,000 42,000 Profit margin 77,500 55,520 $ 1,500 3,500 5,000 Other revenues Interest revenue Investment by owner Other expenses Depreciation expense Drawings by owner Profit from operations 7,000 48,000 55,000 (50,000) $ 5,520 OLD EAST COMPANY Balance Sheet Year Ended December 31, 2021 Assets Cash $16,700 Accounts receivable 7,880 Merchandise inventory, January 1, 2021 30,000 Merchandise inventory, December 31, 2021 24,000 Equipment $70,000 Less: loan payable (for equipment purchase) 50,000 20,000 Total assets $98,580 Liabilities and Owner's Equity Long-term investment $50,000 Accumulated depreciation equipment 21,000 Sales discounts 2.900 Total liabilities 73,900 Owner's equity 24,680 Total liabilities and owner's equity S98,580 The owner of the company, Linda Grewal, is confused by the statements and has asked you for your help. She doesn't understand how, if her Owner's Capital account was $75,000 at December 31, 2020, owner's equity is now only $24,680. The accountant tells you that $24,680 must be correct because the balance sheet is balanced. The accountant also tells you that he didn't prepare a statement of owner's equity because it is an optional statement. You are relieved to find out that, even though there are errors in the statements, the amounts used from the accounts in the general ledger are the correct amounts. Instructions I of Prepare the correct multiple-step income statement (12 marks), statement of owner's the loan payable on the equipment must be paid during 2022, In your own handwriting, on your own paper (no special formatting required) or using the blank forms provided on the Moodle website), answer Part 2 Question #1. Write your name, student number, and the date at the top on the first page Upload your answer in the Moodle assignment drop box for Test #3 in PDF format (can be one or multiple pages)