Abbott Laboratories

Financial Summary:

• Beginning Inventory: $6,200,000
• Purchases: $18,500,000
• Ending Inventory: $6,000,000
• Net Sales: $30,000,000
• Operating Expenses: $8,700,000

Requirements:

1. Formulate the Cost of Goods Sold (COGS) statement.
2. Compute the Gross Profit.
3. Calculate the Inventory Turnover Ratio.
4. Prepare a partial Income Statement showing Net Sales, COGS, and Gross Profit.
5. Discuss the implications of Abbott's inventory turnover ratio on its product development and market responsiveness.