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Marcy's, Inc. operates department stores located primarily in the Southwest, Southeast, and Midwest. In its 2013 third-quarter report, the company reported Cost of Goods Sold of $2.4 billion, ending inventory for the third quarter of $3.5 billion, and ending inventory for the previous quarter of $3.1 billion. Estimate merchandise purchases for the third quarter. (Enter your answer in billions rounded to 1 decimal place.)

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Answer:

Estimate merchandise purchases for the third quarter is $2.8 billion

Explanation:

The computation of the merchandise purchases for the third quarter is shown below:

= Ending inventory + Cost of goods sold - Beginning inventory

= $3.5 billion + $2.4 billion - $3.1 billion

= $2.8 billion

We simply apply the cost of goods sold formula which is shown below:

Cost of goods sold = Opening inventory + Purchase - ending inventory

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The estimated value of merchandise purchase is $2.8 billion.

What are purchases?

In business terms, purchases include all the goods that are acquired for the purpose of further production or sales, in the day-to-day operations of the business.

The value of purchases can be determined as follows:

We know that:

[tex]\rm COGS = Beginning\:inventory + Purchases - Ending \:inventory[/tex]

If we modify the above formula, the value of purchases will be:

[tex]\rm Purchases = COGS +Beginning\:inventory - Ending\:inventory[/tex]

Given:

The value of COGS is $2.4 billion

The value of beginning inventory is $3.1 billion

The value of ending inventory is $3.5 billion

Therefore the value of purchases will be:

[tex]\rm Purchases = COGS +Beginning\:inventory - Ending\:inventory\\\\\rm Purchases = \$2.4\: billion + \$3.1\:billion - \$3.5\:billion\\\\\rm Purchases = \$2.8\:billion[/tex]

Therefore the value of purchases is $2.8 billion.

Learn more about purchases here:

https://brainly.com/question/13372147

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