What is the amount of the gross profit?

During the current year, merchandise is sold for $315,800 cash and $1,225,000 on account. The cost of the merchandise sold is $875,000. What is the amount of the gross profit?

Expert Solution

We must deduct the cost of goods sold (COGS) from the total sales income in order to determine the gross profit.

Total Sales Revenue = Cash Sales + Credit Sales Total Sales Revenue = $315,800 (cash sales) + $1,225,000 (credit sales) Total Sales Revenue = $1,540,800

Gross Profit = Total Sales Revenue - Cost of Goods Sold (COGS) Gross Profit = $1,540,800 - $875,000 Gross Profit = $665,800

Therefore, the amount of the gross profit is $665,800.

balaji rao answered 1 year ago

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