Procter & Gamble Co.

Summary:

• Beginning Inventory: $5,500,000
• Purchases: $14,500,000
• Ending Inventory: $5,200,000
• Net Sales: $24,000,000
• Operating Expenses: $7,000,000

Requirements:

1. Develop 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 Procter & Gamble's inventory turnover ratio on its production planning and distribution strategy.