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27 June, 19:20

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.

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  1. 27 June, 19:25
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    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
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