Visa Inc.

Annual Financial Data:

• Beginning Inventory: $2,500,000
• Purchases: $9,000,000
• Ending Inventory: $2,200,000
• Net Sales: $15,000,000
• Operating Expenses: $4,500,000

Requirements:

1. Prepare the Cost of Goods Sold (COGS) statement.
2. Calculate the Gross Profit.
3. Compute the Inventory Turnover Ratio.
4. Draft a partial Income Statement showing Net Sales, COGS, and Gross Profit.
5. Analyze the effect of Visa's inventory turnover ratio on its financial services and transaction processing.