Question

During the current year, merchandise is sold for $300,000 cash and for $625,000 on account. The cost of merchandise sold is $450,000. What is the amount of gross profit?

Answer 1

Solution:
	Calculation of Gross Profit
		Amount	Amount
	Revenues:
	Cash Sales	$         300,000
	Credit Sales	$         625,000
	Total Sales		$        925,000
	Less: Cost of Good Sold
	Cost of Merchandise Sold		$        450,000
	Gross Profit		$        475,000
	Answer = Gross Profit = $ 475,000