The following data were taken from the accounts of Delhi Hardware, a small retail business. Determine the gross profit.

Sales ...................... $113,500

Sales returns and allowances .............. 800

Sales discounts ................... 500

Merchandise inventory, January 1 ........... 34,000

Purchases during the period .............. 76,000

Purchases returns and allowances during the period ..... 4,000

Purchases discounts taken during the period ........ 3,000

Freight-in on merchandise purchased during the period ... 1,500

Merchandise inventory, December 31 ......... 30,000