Knitting Questions

So, I have a knitting pattern for a square. It is written by that same company I always complain about.

The pattern is:
Cast on 27 stitches
1st row: K to end
2nd - 4th rows: K to end
5th row: *K4, yarn forward, slip 1, knit 1, pass slipped stich over, repeat from * to last 3 stitches, k3
6th row: P to end
7th row: k2, knit 2 together, yarn forward, k1, yarn forward, slip 1, pass slipped stitch over, *k1, knit 2 together, yarn forward, slip 1 stitch, knit 1, pass over slipped stitch, repeat from * to last 2 stitches, k2.
8th row: P to end
(repeat these 8 till you have 32 rows, then K4 rows)

I just want to check that when I pass the slipped stitch over in the 5th row, I'm passing it back to my left hand needle.

Also, I'm not sure how this pattern doesn't end up with me having a lot fewer than 27 stitches by row 8. I suspect I'm supposed to be creating stitches somewhere, but I am not sure where.

HALP!

Please :)