Selected data from Sheridan Corporation's year-end financial statements are presented below.The difference between average and ending inventory is immaterial.
What were Sheridan's sales for the year?
A) $240,000.
B) $480,000.
C) $800,000.
D) $1,200,000.Sales = (60,000 * 8)/(1 - .40)

Question

Selected data from Sheridan Corporation's year-end financial statements are presented below.The difference between average and ending inventory is immaterial. 
What were Sheridan's sales for the year?
A) $240,000. 
B) $480,000. 
C) $800,000. 
D) $1,200,000.Sales = (60,000 * 8)/(1 - .40)

Quizplus · Accepted Answer

The formula to calculate sales is given as Sales = (Beginning Inventory + Purchases - Ending Inventory) * Gross Profit Percentage. From the given information, we know that Beginning Inventory is $40,000, Purchases are $520,000, Ending Inventory is $60,000, and Gross Profit Percentage is 40%. Hence, Sales can be calculated as (40,000 + 520,000 - 60,000) * 0.40 = $800,000. Therefore, the correct answer is option C.

Selected Data from Sheridan Corporation's Year-End Financial Statements Are Presented