Question

During the current year, merchandise is sold for $137,500 cash and $425,600 on account. The cost of goods sold is $322,325. What is the profit?

Answer 1

To calculate profit, the student should add together cash and credit sales to determine total revenue, and then subtract the cost of goods sold from this total. The profit is $240,775.

Step-by-step explanation:

The student is asking about determining the profit from certain financial transactions.

To find the profit, we subtract the cost of goods sold from the total sales revenue. In this case, we add both cash sales and sales on account to get total revenue, which is $137,500 (cash) + $425,600 (on account) = $563,100.

Then we subtract the cost of goods sold, which is $322,325. Thus, the profit is $563,100 - $322,325 = $240,775.