Selected amounts from the accounting records of Presley Video Sales for the year ended December 31, 2014, follow:

Required
1. Presley Video Sales uses the perpetual inventory system. Prepare the business's multistep income statement for the year ended December 31, 2014.
2. Compute the rate of inventory turnover for the year. The inventory balance on December 31, 2013, was $25,400 and on December 31, 2014, was $28,600. Last year the turnover rate was 5.42 times. Does this two-year trend suggest improvement or deterioration in inventory turnover?

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Journal Entries Sales Revenue Dec. 31 281,400 Interest Revenue 1,800 Income Summary Income Summary 283,200 31 254,400 Cost of Goods Sold 161,200 Sales Discounts 12,600 Sales Returns and Allowances 6,900 Selling Expenses General Expenses Income Summary B. Presley, Capital B. Presley, Capital B. Presley, Withdrawals 57,800 15,900 31 28,800 28,800 31 28,000 28,000