Question

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?

Answer 1

The amount of the gross profit 665,800

315,800+1,225,000=1,540,800

1,540,800-875,000=665,800

Gross Profit is the money that remains after production costs have been deducted from revenue; it tells investors how much profit a company makes from making and selling its products.

What Is a Gross Profit Example?

Take a look at the following quarterly income statement, where a company's revenues are $100,000 and its cost of goods sold is $75,000. Importantly, your computation would exclude any selling, general, and administrative (SG&A) costs from the category of expenses. The $100,000 in revenues would be subtracted from $75,000 in cost of goods sold to arrive at a total of $25,000 in gross profit.

Investors can evaluate how much profit a firm makes from the manufacturing and selling of its products by looking at the income that is left over after production costs are deducted from revenue.

In contrast, net profit, also known as net income, is the remaining profit after deducting all costs and expenses from revenue.

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Answer 2

Gross Profit is the money left over after deducting production costs from revenue; it tells investors how much profit a company makes from manufacturing and selling its products. The total gross profit is $665,800.

What Is a Gross Profit Example?

• Take a look at the following quarterly income statement, where a company's revenues are $100,000 and its cost of goods sold is $75,000. Importantly, your computation would exclude any selling, general, and administrative (SG&A) costs from the category of expenses.

• The $100,000 in revenues would be subtracted from $75,000 in cost of goods sold to arrive at a total of $25,000 in gross profit.

• Investors can evaluate how much profit a firm makes from the manufacturing and selling of its products by looking at the income that is left over after production costs are deducted from revenue.

• In contrast, net profit, also known as net income, is the remaining profit after deducting all costs and expenses from revenue.

Therefore,

The amount of the gross profit 665,800

315,800+1,225,000=1,540,800

1,540,800-875,000=665,800

To learn more about Gross Profit refer to:

brainly.com/question/21637154

#SPJ4