Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 8

Inferring Purchases Using the Cost of Goods Sold Equation
Dillard's, Inc. , operates 308 department stores located in 29 states primarily in the Southwest, Southeast, and Midwest. In its annual report for the year ended January 29, 2011, the company reported Cost of Goods Sold of $3,976 million, ending inventory for the current year of $1,290 million, and ending inventory for the previous year of $1,301 million. Is it possible to develop a reasonable estimate of the merchandise purchases for the year If so, prepare the estimate. If not, explain why.