During the current year, merchandise is sold for $18,300 cash and $295,700 on account.

During the current year, merchandise is sold for $18,300 cash and $295,700 on account. 

The cost of the merchandise sold is $188,000. What is the amount of the gross profit?

Answer:

a. $126,000 ($18,300 + $295,700 – $188,000)