Marcy's, Inc., operates department stores located primarily in the Southwest, Southeast, and Midwest. In its 2016 third-quarter report, the company reported Cost of Goods Sold of $6,900 million, ending inventory for the third quarter of $7,800 million, and ending inventory for the previous quarter of $7,500 million. Estimate merchandise purchases for the third quarter

Purchases= $7,200 million

Explanation:

Purchases are estimated using the following formula. It shows that cost of goods less beginning inventory plus ending inventory is equal to purchases.

Cost of goods sold is the amount of finished goods that is sold to the customer

Purchases = Cost of goods sold - Inventory at beginning + Ending inventory

Purchases = 6,900 million - 7,500 million + 7,800 million

Purchases= $7,200 million

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