Pineapple Republic is a specialty retailer that operates stores selling clothes under the trade names Pineapple Republic, Banana Republic, and Old Navy.

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 $2.3 billion. Net Sales for the current quarter were $6.6 billion. Gross Profit was $2.6 billion and Net Income was $ 350 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 (in billions): Rearrange the equation (Sales – CGS = GP):           Net Sales $ 6.6     –  Gross Profit   2.6           Cost of Goods Sold $ 4     Purchases (in billions): Rearrange the CGS equation (BI + P – EI = CGS):            Cost of Goods Sold $ 4      +  Ending Inventory   3.3      –  Beginning Inventory   (2.3 )          Purchases $ 5