The amount of net sales for 2021 is $1,035,000.
Average inventory = (Beginning inventory + Ending inventory) / 2
Average inventory = ($63,000 + $75,000) /2
Average inventory = $69,000
- The formula for Inventory turnover ratio is <em>{Cost of goods sold/Average inventory]</em>
6 = Cost of goods sold / $69,000
Cost of goods sold = $414,000
Given Gross profit ratio is 40%: Gross profit = 40% on sales
Let the sales be $K
Gross profit = Sales - Cost of goods sold
0.4K = K - $414,000
0.4K = $414,000
K = $414,000 / 0.4
K = $1,035,000
Therefore, the amount of net sales for 2021 is $1,035,000.
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