Nike, Inc.

Details:

• Beginning Inventory: $2,700,000
• Purchases: $9,800,000
• Ending Inventory: $3,300,000
• Net Sales: $15,800,000
• Operating Expenses: $4,600,000

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. Analyze the effect of the Inventory Turnover Ratio on Nike's supply chain efficiency.