During the current year, merchandise is sold for $101,200 cash and $521,200 on account. The cost of merchandise sold is $435,700. What is the amount of the gross profit?

Question

Business

Drake Patterson

26 April, 02:08

During the current year, merchandise is sold for $101,200 cash and $521,200 on account. The cost of merchandise sold is $435,700. What is the amount of the gross profit?

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Answers (1)

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Yareli Suarez · Answer 1

The gross profit amount is $186,700

Explanation:

The formula for gross profit is Gross profit = Total revenue - cost of goods sold.

In this question we are given the cost of goods sold which is $435,700.

In order to find the revenue we need to find total sales. We know that 101,200 was sold on cash and 521,000 on account so if we add these 2 we will have total sales. 521,200+101,200=622,400

Now that we have the total sales and cost of goods sold we will put these numbers in the formula to find the gross profit.

Gross profit = 622,400-435,700=186,700