P5-8B The trial balance and adjustments columns of the work sheet of Carolina Crystal Company follow. Trial Balance Adjustments Account Title Debit Credit Debit Credit Cash. 7.300 Accounts receivable. 4.360

(a) 1.400 Inventory. 9.630

(b) 2.100 Supplies 10.700 (C) 7.940 Equipment.. 99.450 Accumulated depreciation... 29.800

(d) 9.900 Accounts payable 13.800 Salary payable

(b) 200 Unearned sales revenue...... 3.780

(e) 2,600 Note payable, long-term...... 10.000 Claire Burke. capital. 58.360 Claire Burke, drawing. 35,000 Sales revenue 212.000

(a) 1,400

(e) 2.600 Sales returns. 3,100 Cost of goods sold. 95.600

(b) 2.100 Selling expense. 40.600 (C) 7.940 General expense. 21.000 (1) 200

(d) 9.900 Interest expense 1.000 Total.. 327.740 327.740 24.140 24.140 Required 1. Inventory on hand at September 30, 20X2. was $9.250. Without completing a formal accounting work sheet, prepare the company's multi-step income statement for the year ended September 30, 20X3. 2. Compute the gross profit percentage and the inventory turnover for 20X3. For 20X2. Carolina's gross profit percentage was 50% and the inventory turnover rate was 7.8 times. Does the two-year trend in these ratios suggest improvement or deterioration in profitability?