Prepare Azalea Technology's single-step income statement for 2008, using the data from Exercise 5-23. Compute the gross profit percentage, and compare it with last year's gross profit percentage of 50%. Does the trend in the gross profit percentage suggest better or worse profitability during the current year?

Exercise 5-23

Selected amounts from the accounting records of Azalea Technology follow.

Requirements 

1. Prepare Azalea's multi-step income statement for the year ended December 31,2008.

2. Compute the rate of inventory turnover for 2008. Last year the turnover rate was 3.8 times. Does this trend suggest improvement or deterioration in inventory turnover?

Accounts payable $16,200 Owner's equity, Accumulated depreciation 18,700 Cost of goods sold December 31, 2008 99,400 Sales discounts $126,070 9,000 General expenses 23,500 Sales returns 4,600 Interest revenue 1,300 Sales revenue 241,000 Inventory, December 31, 2008 21,000 Selling expenses 37,800 Inventory, December 31, 2007 26.400 Unearned sales revenue 6,500