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?

Question

Quizplus · Accepted Answer

Using the formula for inventory turnover ratio, we can find that the cost of goods sold for the year was $126,000. Then, using the gross profit ratio of 40%, we can calculate that net sales for the year were $210,000. Therefore, the best choice is D.

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