Question

Reyes Company had a gross profit of $720,000, total purchases of $840,000, and an ending inventory of $480,000 in its first year of operations as a retailer. Reyes's sales in its first year must have been:a. $1,080,000.b. $1,320,000.c. $360,000.d. $1,200,000.

Answer 1

Answer:

The correct answer is A: $1,080,000

Explanation:

Giving the following information:

Reyes Company had a gross profit of $720,000, total purchases of $840,000, and an ending inventory of $480,000 in its first year of operations as a retailer.

Assuming there was any beginning inventory:

Sales= gross profit + (purchase - ending inventory)

Sales= 720,000 + (840,000 - 480,000)= $1,080,000