Wilson Hardware Sells on the Instalment Plan

Multiple Choice

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