FMGT 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. E. FINANCIAL STATEMENTS (15 Marks) $50,770 K. Milani, capital. K. Milani, drawings $34,850 27,300 1,500 32,000 24,000 Accounts payable. Long-term note receivable Merchandise inventory 14,000 Accounts receivable. Accum. depreciation, computers.. Accum. depreciation, equipment 55,000 47,000 Note payable, due 2022 Prepaid rent... Rent expense... Salaries expense Cash.. 9,500 4,500 1,500 Computers.... Cost of goods sold. Depreciation expense Equipment... Insurance expense. 14,000 195,000 50,000 6,200 4,000 Salaries payable 80,000 100 8,400 Sales discounts Interest expense 1,000 Sales returns and allowances Sales revenue.. 2,350 Interest payable 320,000 280 Interest revenue... Supplies... Supplies expense. 900 700 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