Prepare financial statements and calculate ratiosperpetual system.

An alphabetical list of Rikards Company's adjusted accounts at its fiscal year end, August 31, 2017, follows. All accounts have normal balances.

Accounts payable

$ 15,500

Notes payable

$ 42,000

Accumulated depreciationequipment

14,000

Prepaid insurance

575

Accumulated depreciationfurniture

17,500

R. Smistad, capital

65,750

Cash

15,450

R. Smistad, drawings

80,000

Cost of goods sold

271,500

Rent expense

24,000

Depreciation expense

7,000

Salaries expense

50,000

Equipment

35,000

Salaries payable

2,250

Furniture

42,000

Sales

465,000

Insurance expense

3,575

Sales returns and allowances

16,300

Interest expense

2,100

Supplies

950

Interest payable

525

Supplies expense

6,325

Merchandise inventory

70,350

Unearned revenue

2,600

Additional information:

• 1.Of the notes payable, $6,000 becomes due on February 17, 2018. The balance is due in 2019.
• 2.On July 18, 2017, R. Smistad invested $3,500 cash in the business.

Instructions

(a)provide multiple-step income statement, statement of owner's equity, and classified balance sheet.

(b)Calculate the gross profit margin and profit margin.