Wilson Hardware sells on the instalment plan. Sales- related figures for Saunders Hardware for 2013 were as follows: Sales, $600 000; down payments on the sales, $60 000; collections on instalments, $250 000; beginning inventory, $90 000; ending inventory $60 000; and purchases, $400 000. What is Saunders Hardware's gross profit using the sales method of income recognition?
A)$260 000
B)$200 000
C)$190 000
D)$170 000

Question

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The Answer of Wilson Hardware sells on the instalment plan. Sales- related figures for Saunders Hardware for 2013 were as follows: Sales, $600 000; down payments on the sales, $60 000; collections on instalments, $250 000; beginning inventory, $90 000; ending inventory $60 000; and purchases, $400 000. What is Saunders Hardware's gross profit using the sales method of income recognition?
A)$260 000
B)$200 000
C)$190 000
D)$170 000

Wilson Hardware Sells on the Instalment Plan