Financial Statement Impact Gifford Sales does not presently offer a sales discount. Gifford is considering a discount policy in order to accelerate customer collections. In order to determine the impact of the discount on selected monthly income statement items, various discount terms are assumed. Gifford assumes total sales of $100,000 subject to the discount with an associated cost of merchandise sold of $55,000 for January, 2014. Gifford further assumes that the percent of sales that will take the discount, shown on the row just below the slider, will increase as the discount increases, as follows No Discount 0.5% 1% 2% Sales discount assumption Percentage of sales taking the discount 0% 50% 80% 100% To illustrate, after the accounts have been adjusted at January 31, the end of the fiscal year, the following balances are taken from the ledger of Frost Home Repairs: Gifford Company Income Statement Through Gross Profit For the Month Ended January 31, 2014 Sales Sales Discount Net Sales Cost of Merchandise Sold Gross Profit $100,000 55,000 Answer the following questions using the sales discount slider and income statement information 1.What is the estimated gross profit when the sales discount is .5% for January