ABC Company uses cash-basis accounting for its records. During 2015, ABC collected $400,000 from its customers, made payments of $300,000 to its suppliers for inventory (e.g., Purchases account), and paid $140,000 for operating costs. ABC wants to prepare accrual-basis financial statements. In gathering information for the accrual-basis financial statements, ABC discovered the following:

Customers owed ABC $45,000 at the beginning of 2015 and $55,000 at the end of 2015.

ABC owed suppliers $20,000 at the beginning of 2015 and $28,000 at the end of 2015.

ABCs beginning inventory was $40,000 and its ending inventory was $44,000.

What should ABCs Gross Profit be on the accrual basis?

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