Problem $4-32($LO$.2)$

Selma operates a contractor's supply store. She maintains her books using the cash method. At the end of $2023,$ her accountant computes

her accrual basis income that is used on her tax return. For $2023,$ Selma had cash receipts of $$1,400,000,$ which included $$200,000$

collected on accounts receivable from $2022$ sales. It also included the proceeds of a $$100,000$ bank loan. At the end of $2023,$ she had

$$250,000$ in accounts receivable from customers, all from $2023$ sales.

a$.$ Compute Selma's accrual basis gross revenues for $2023.$

$$

b$.$ Selma paid cash for all of the purchases. The total amount paid for merchandise in $2023$ was $$1,300,000.$ At the end of $2022,$ she had

merchandise on hand with a cost of $$150,000.$ At the end of $2023,$ the cost of merchandise on hand was $$300,000.$

Compute Selma's gross income $($profit$)$ from merchandise sales for $2023.$

The cost of goods sold for $2023$ under the accrual method is $

Therefore, the gross profit from merchandise sales for $2023$

under the accrual basis is $