Alphabet Inc.

Details:

• Beginning Inventory: $4,000,000
• Purchases: $14,000,000
• Ending Inventory: $5,000,000
• Net Sales: $20,000,000
• Operating Expenses: $6,000,000

Requirements:

1. Formulate the Cost of Goods Sold (COGS) statement.
2. Calculate the Gross Profit.
3. Compute the Inventory Turnover Ratio.
4. Draft a partial Income Statement showing Net Sales, COGS, and Gross Profit.
5. Evaluate the implications of the Inventory Turnover Ratio for Alphabet's profitability.