Question3

Presented below is the adjusted trial balance of Katie's Pet Supplies as at its fiscal year end, November 30, 2017. All accounts are their normal balance (debit or credit). Katie's uses the periodic inventory system.

Accounts payable............................$ 32,310K. Milani, Capital.......................$119,480

Accounts receivable............................13,770K. Milani, Drawings...................12,000

Accum. depreciation, Building.61,200 Long-term note receivable............................15,000

Accum. depreciation, equipment.........19,880Merchandise inventory..............34,360

Advertising expense..............................1,000Mortgage payable,..................106,000

Cash.....................................................7,500Prepaid Insurance....................4,500

Building.............................................175,000Property Tax expense...............3,500

Purchases.........................................634,700Salaries expense......................122,000

Depreciation Expense.........................14,000Salaries payable.......................8,500

Equipment..........................................57,000Sales discounts........................8250

Freight-out expense..............................8,200Sales returns and allowances...9,845

Insurance expense...............................9,000Sales revenue..........................872,000

Interest expense...................................5,300Unearned Revenue..................3,000

Land.............................................85,000 Utilities Expense.......................19,800

Freight in.......................................5,060Rent revenue.......................2,800

Purchase discount....................6,300Purchase return and Allowance13,315

Additional Information:

1.Katie's pet supplies uses periodic inventory

2.Physical count determined that the merchandise on hand at Nov 30, 2017 was $37,350.

3.On the Mortgage payable 8500 is due on March 31, 2018.

Instruction:

a.Prepare the multistep Income Statement, Statement of Owners Equity, and Classified Balance Sheet

b.Calculate the Inventory turnover and Liquidity ratio