Pineapple Republic is a specialty retailer that operates stores selling clothes
ID: 2539275 • 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 Required Determine the Cost of Goods Sold and Purchases for the third quarter. (Enter your answers in billions rounded to 1 decimal place.) Cost of Goods Sold billions Purchase Amount billionsExplanation / Answer
Cost of goods sold and Ending inventory is as calculated below:
Particulars Amount Ending Inventory (3rd Quarter) $3.3 billion Ending Inventory (2nd quarter) $1.8 billion Net Sales (3rd quarter) $6.6 billion Gross Profit (3rd quarter) $2.6 billion Net income (3rd quarter) $260 million Cost of goods sold = Sales- Gross Profit $4 billion ($6.6-$2.6) Now Cost of goods sold $4 billion Add ending inventory is $3.3 billion Less: opening inventory $1.8 billion Purchases $5.5 billion