Question

During the month, merchandise is sold for $23,500 cash and for $34,000 on account. the cost of merchandise sold is $41,500. what is the amount of gross profit?

Answer 1

In getting the gross profit, you need to add all the assets and less the expenses. See below:

Asset - Expenses = Profit

Below are the assets:
$ 23,000 cash on hand 
$ 34,000 cash on bank

Therefore the total asset is $ 57,500

While the expense is $41,500

Solution:  $57,500 - 41, 500 = $16,000



I hope it helps