Refer to Exercise 5-15. After completing Wells Decorating Centre's income statement for the year ended December 31, 2014, compute these ratios to evaluate Wells Decorating Centre's performance:
€¢ Gross margin percentage
€¢ Inventory turnover (ending inventory one year earlier, at December 31, 2013, was $54,500)
Compare your figures with the 2013 gross margin percentage of 40 percent and the inventory turnover rate of 3.82 times. Does the two-year trend suggest that Wells Decorating Centre's profits are increasing or decreasing?
In Exercise 5-15
The Trial Balance and Adjustments columns of the work sheet of Wells Decorating Centre include these accounts and balances at December 31, 2014.

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Trial Balance Adjustments Account Title Debit Credit Debit Credit Cash 17,000 27,500 Accounts receivable (a) 2,200 (b) 1,400 Inventory 63,500 Supplies 18,600 (c) 6,400 70,000 Store fixtures Accumulated amortization 35,000 (d) 7,000 Accounts payable Salary payable Note payable, long-term B. Wells, capital 31,200 (e) 3,800 12,500 41,800 B. Wells, withdrawals 34,000 Sales revenue 431,400 (a) 2,200 Sales discounts 4,300 244,400 Cost of goods sold (b) 1,400 (c) 5,200 Selling expenses 42,800 (e) 3,800 (c) 1,200 28,700 General expenses (d) 7,000 Interest expense 1,100 Total 551,900 20,800 551,900 20,800