During the current year, merchandise is sold for $315,800 cash and $1,225,000 on account.

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:

a. $665,800 ($315,800 + $1,225,000 – $875,000)