3M Company

Details:

• Beginning Inventory: $6,000,000
• Purchases: $17,000,000
• Ending Inventory: $5,800,000
• Net Sales: $29,000,000
• Operating Expenses: $8,000,000

Requirements:

1. Formulate the Cost of Goods Sold (COGS) statement.
2. Compute the Gross Profit.
3. Calculate the Inventory Turnover Ratio.
4. Draft a partial Income Statement showing Net Sales, COGS, and Gross Profit.
5. Evaluate how 3M's inventory turnover ratio affects its R&D investments and market positioning.