Question

During the current year, merchandise is sold for $50,900 cash and for $80,700 on account. the cost of the goods sold is $85,540. What is the amount of the gross profit?

Answer 1

Amount of gross profit is $46,060.

Gross profit = Sale value - cost of the goods sold

                    =  ($50,900 +  $80,700) - $85,540

                    =  $46,060.

Gross profit is the amount of money a company keeps after deducting all of the expenses incurred in producing and offering its goods or services. By subtracting the cost of goods sold (COGS) from your total sales, you may determine gross profit. The value is the lowest price the company would receive if it sold all of its assets in an auction. All  the products sold by the business are included in the overall sales.

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