During the current year, merchandise is sold for $450,000 cash and $1,350,000 on account

During the current year, merchandise is sold for $450,000 cash and $1,350,000 on account. The cost of the merchandise sold is $1,100,000. What is the amount of the gross profit?


Answer:
a. $700,000 ($450,000 + $1,350,000 – $1,100,000)