Johnson & Johnson

Financial Information:

• Beginning Inventory: $4,800,000
• Purchases: $13,000,000
• Ending Inventory: $4,500,000
• Net Sales: $22,000,000
• Operating Expenses: $6,200,000

Requirements:

1. Prepare the Cost of Goods Sold (COGS) statement.
2. Calculate the Gross Profit.
3. Compute the Inventory Turnover Ratio.
4. Construct a partial Income Statement showing Net Sales, COGS, and Gross Profit.
5. Analyze how Johnson & Johnson's inventory turnover ratio impacts its pharmaceutical and consumer health product lines.