Use the Information Below to Answer the Following Questions That

Multiple Choice

Use the information below to answer the following questions that refer to Table B-2. Based on the information in Table B-2, and given that the gross margin percent is 25%, what is the cost of sales?
$$\begin{array} { l c } { \text { Table B-2 } } & \\\text { Gross sales } & \$ 240,000 \\\text { Returns } & \$ 20,000 \\\text { Allowances } & \$ 20,000 \\\text { Gross margin } & 25 \% \\\text { Beginning inventory } & \$ 50,000 \\\text { Ending inventory } & \$ 50,000 \\\text { Expenses } & \$ 40,000 \\\text { Markdowns } & \$ 30,000 \\\text { Investment } & \$ 50,000\end{array}$$

A) $75,000.
B) $150,000.
C) $55,000.
D) $12,500.
E) $50,000.