Refer to Best Buy’s financial statements in Appendix A to answer the following.

Required 1. Assume that the amounts reported for inventories and cost of sales reflect items purchased in a form ready for resale. Compute the net cost of goods purchased for the fiscal year ended February 26, 2005.

2. Best Buy includes freight costs in cost of goods sold. List three such costs, using information in footnote 1.

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Five-Year Financial Highlights $ in millions, except per share amounts Fiscal Year Consolidated Statements of Earnings Data Revenue Operating income Earnings from continuing operations Loss from discontinued operations, net of tax Gain (loss) on disposal of discontinued operations, net of tax Cumulative effect of change in accounting principles, net of tax Net earnings 2005 2004 2003 2002 2001 $27,433 $24,548 $20,943 $17,711 $15,189 1,442 934 1,304 1,010 908 611 800 622 570 401 510 - (29) (441) (66) 51 (5) - - 984 705 (82) 99 570 396 Per Share Data Continuing operations $2.79 $2.41 $1.90 $1.77 Discontinued operations - (0.09) (1.34) $1.26 (0.02) Gain (loss) on disposal of discontinued operations 0.15 (0.20) Cumulative effect of accounting changes (0.25) Net earnings 2.94 2.13 0.31 1.77 TIR 1.24 Cash dividends declared and paid 0.42 0.40 - Common stock price: High 62.20 62.70 53.75 51.47 59.25 Low 43.87 25.55 16.99 22.42 14.00 Operating Statistics Comparable store sales change 4.3% 7.1% 2.4% 1.9% 4.9% Gross profit rate 23.7% 23.9% 23.6% 20.0% 18.5% Selling, general and administrative expense rate 18.4% 18.6% 18.8% 14.9% 14.5% Operating income rate 5.3% 5.3% 4.8% 5.1% 4.0%