Using the following information, compute the gross profit.

Sales: $172,000 Beginning inventory: $7,000 Purchases: $79,000 Purchase discounts: $2,500 Purchase returns & allowances: $1,300

Freight-in: $2,500

Ending inventory: $32,700

Part A - Show your calculations.

Part B - Choose the best answer from a to e.

a. $122,500

b. $127,000

c. $ 87,300

d. $139,300

e. $120,000