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Chevron Corporation Annual Data: Beginning Inventory: $6,800,000 Purchases: $20,000,000 Ending Inventory: $6,300,000 Net Sales: $32,000,000 Operating Expenses: $9,500,000 Requirements: Develop the Cost of Goods Sold

Chevron Corporation

Annual Data:

  • Beginning Inventory: $6,800,000
  • Purchases: $20,000,000
  • Ending Inventory: $6,300,000
  • Net Sales: $32,000,000
  • Operating Expenses: $9,500,000

Requirements:

  1. Develop the Cost of Goods Sold (COGS) statement.
  2. Compute the Gross Profit.
  3. Calculate the Inventory Turnover Ratio.
  4. Construct a partial Income Statement showing Net Sales, COGS, and Gross Profit.
  5. Discuss how Chevron's inventory turnover ratio affects its exploration and production activities.

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