Berkshire Hathaway Inc.

Summary:

• Beginning Inventory: $5,600,000
• Purchases: $16,500,000
• Ending Inventory: $5,200,000
• Net Sales: $27,000,000
• Operating Expenses: $8,500,000

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. Analyze how Berkshire Hathaway's inventory turnover ratio impacts its investment strategies and portfolio management.