Amazon.com, Inc.

• Beginning Inventory: $3,000,000
• Purchases: $12,000,000
• Ending Inventory: $4,000,000
• Net Sales: $18,000,000
• Operating Expenses: $5,000,000

Requirements:

1. Prepare the Cost of Goods Sold (COGS) statement.
2. Calculate the Gross Profit.
3. Compute the Inventory Turnover Ratio.
4. Prepare a partial Income Statement showing Net Sales, COGS, and Gross Profit.
5. Discuss how the Inventory Turnover Ratio affects Amazon's inventory management strategy.