Reference no: EM133090488

Question - An alphabetical list of Orioles Company adjusted accounts at its fiscal year end, August 31, 2021, follows. All accounts have normal balances.

Accounts payable	$15,570	Notes payable	$42,000
Accumulated depreciation-equipment	14,000	Prepaid insurance	575
Accumulated depreciation-furniture	17,500	R. Smistad, capital	65,750
Cash	24,910	R. Smistad, drawings	78,000
Cost of goods sold	272,500	Rent expense	24,200
Depreciation expense	7,060	Salaries expense	50,400
Equipment	35,000	Salaries payable	2,250
Furniture	42,000	Sales	475,000
Insurance expense	3,575	Sales returns and allowances	16,300
Interest expense	2,110	Supplies	950
Interest payable	585	Supplies expense	6,325
Merchandise inventory	71,350	Unearned revenue	2,600

Additional information:

1. Of the notes payable, $6,200 becomes due on February 17, 2022. The balance is due in 2023.

2. On July 18, 2021, R. Smistad invested $3,500 cash in the business.

Required -

1. Prepare a multiple-step income statement.

2. Prepare a statement of owner's equity.

3. Prepare a classified balance sheet.

4. Calculate the gross profit margin and profit margin.