The trial balance and adjustments columns of the work sheet of Biagonni Development Company include the following accounts and balances at November 30, 19X4:

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1. Inventory on hand at November \(30,19 \mathrm{X} 3\), was \(\$ 52,650\). Without entering the preceding data on a formal work sheet, prepare the company's multiple-step income statement for the year ended November 30, 19X4, and its November 30, 19X4, balance sheet. Show your computation of the ending balance of Retained Earnings.
2. Compute the gross margin percentage and the rate of inventory turnover for 19X4. For 19X3, Biagonni's gross margin percentage was 58 percent, and inventory turnover was 1.1. Does the two-year trend in these ratios suggest improvement or deterioration in profitability?

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Trial Balance Adjustments Account Title Debit Credit Debit Credit Cash............... 4,000 Accounts receivable.. 14,500 (a) 6,000 Inventory. 46,330 (b) 1,010 Supplies. 2,800 (c) 2,400 Furniture. 39,600 Accumulated depreciation 4,900 (d) 2,450 Accounts payable... 12,600 Salary payable... (f) 1,000 Unearned sales revenue 13,570 (e) 6,700 Note payable, long-term.. 15,000 Common stock... 20,000 Retained earnings.. Dividends...... 40,310 42,000 Sales revenue. 164,000 (a) 6,000 (e) 6,700 Sales returns 6,300 Cost of goods sold. 72,170 (b) 1,010 Selling expense. 28,080 (f) 1,000 General expense. 13,100 (c) 2,400 (d) 2,450 Interest expense.. 1,500 Total......... 270,380 270,380 19,560 19,560