IBM

Financial Information:

• Beginning Inventory: $3,800,000
• Purchases: $12,000,000
• Ending Inventory: $3,500,000
• Net Sales: $18,000,000
• Operating Expenses: $5,200,000

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 IBM's inventory turnover ratio on its technological advancements and service delivery.