Phillips Sales Company had the following balances in its accounts on January 1, 2014.

Cash	$61,000
Merchandise Inventory	41,000
Land	101,000
Common Stock	81,000
Retained Earnings	122,000

Phillips experienced the following events during 2014.

1.	Sold merchandise inventory that cost $32,800 for $69,700.
2.	Sold land that cost $40,400 for $75,800.

Required
a.	Determine the amount of gross margin recognized by Phillips.