Robertson Corporation's inventory balance was $22,000 at the beginning of the year and $20,000 at the end. The inventory turnover ratio for the year was 6.0 and the gross profit ratio 40%. What were net sales for the year?
A) $126,000.
B) $200,000.
C) $120,000.
D) $210,000.

Question

Quizplus · Accepted Answer

Average inventory = $21,000 × 6.0 = $126,000 = cost of goods sold
$126,000 ÷ (1 ? 0.40) = $210,000

Robertson Corporation's Inventory Balance Was $22,000 at the Beginning of the Year