Inventory began with $30,000.During the period the company purchased $61,000 of merchandise.At the end of the period,inventory was $22,000.If the gross profit percentage was 40%,what was sales revenue?
A) $46,000
B) $18,000
C) $75,000
D) $115,000

Question

Quizplus · Accepted Answer

To find sales revenue, first calculate the cost of goods sold (COGS): Beginning Inventory ($30,000) + Purchases ($61,000) - Ending Inventory ($22,000) = COGS ($69,000). With a gross profit percentage of 40%, the cost of goods sold represents 60% of sales revenue. Therefore, sales revenue = COGS / 0.6 = $69,000 / 0.6 = $115,000.

Inventory Began with $30,000