Pineapple Republic is a specialty retailer that operates stores selling clothes
ID: 2422959 • Letter: P
Question
Pineapple Republic is a specialty retailer that operates stores selling clothes under the trade names Pineapple Republic, Banana Republic, and Old Navy. Assume that you are employed as a stock analyst and your boss has just completed a review of the annual report of The Pineapple Republic, Inc. for the third quarter of 2013. She provided you with her notes, but they are missing some information that you need. Her notes show that the ending inventory for Pineapple Republic in the current quarter was $3.3 billion and in the previous quarter it was $1.8 billion. Net Sales for the current quarter were $6.6 billion. Gross Profit was $2.6 billion and Net Income was $ 260 million. Determine the Cost of Goods Sold and Purchases for the third quarter. (Enter your answers in billions rounded to 1 decimal place.)Explanation / Answer
cost of goods sold = opening stock + purchases - closing stock
cost of goods sold = 1.8 + purchases - 3.3
sales - cost of goods sold = gross profit
6.6 - cost of goods sold = 2.6
cost of goods sold = 6.6 -2.6 = 4
cost of goods sold = opening stock + purchases - closing stock
4 = 1.8 + purchases - 3.3
purchases = 5.5