Question

During the current year, merchandise is sold for $300,000 cash and for $625,000 on account. The...

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?

Homework Answers

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
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