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The disclosure note below is from the financial statements of Michael's Merchants, Inc., an

operator of convenience stores $($$ thousands$).$

Inventories

Inventories, which consist of merchandise and fuel, are stated at the lower of cost or market. For

fuel, cost is determined through the use of the first$-$in$,$ first$-$out $($FIFO$)$ method. For merchandise

inventories, cost is determined through the use of the last$-$in$,$ first$-$out $($LIFO$)$ method. The excess of

replacement cost over the stated LIFO value was $$140,074$ and $$129,302$ at April $30,$ Year $2$ and Year $1,$

respectively. There were no material LIFO liquidations during the period presented. Below is a

summary of the inventory values at April $30,$ Year $2$ and Year $1.$

In Year $2,$ Michael's Merchants reported sales revenue of $$12,845,4$ million and cost of goods sold of

$$11,249\mathrm{.}0$ million.

a$.$ Calculate the amount of inventories purchased by Michael's Merchants in Year $2.$ Round

intermediate calculations and answers to one decimal place.

$

million.

b$.$ What amount of gross profit would Michael's Merchants have reported if the FIFO method had

been used to value all inventories in Year $2.$ Round intermediate calculations and answer to one

decimal place.

$

c$.$ Calculate the gross profit margin $($GPM$)$ as reported and assuming that the FIFO method had

been used to value all inventories. Round answers to two decimal places $($i$.$e$.,0\mathrm{.}15785=15\mathrm{.}79\%)$

As reported

b

Under FIFO

$6$

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