United Services and Supplies reports net income of $60,000 and cost of goods sold of $360,000. US&S's gross profit rate was 40%, net sales were
A) $600,000.
B) $900,000.
C) $960,000.
D) $660,000.

Question

Quizplus · Accepted Answer

Gross profit rate = Gross profit / Net sales40% = (Net sales - Cost of goods sold) / Net sales40% = (Net sales - $360,000) / Net sales0.40 * Net sales = Net sales - $360,0000.60 * Net sales = $360,000Net sales = $360,000 / 0.60Net sales = $600,000

United Services and Supplies Reports Net Income of $60,000 and Cost