Gross profit = Sales - Cost of goods sold (accrual basis)

Steps:

• Sales revenue = total receipts from customers + amount owing by customers = 85,000 + 10,000 = 95,000
• Cost of goods sold = amount owing to suppliers = 50,000 (unpaid portion for goods sold this year)
• Payments to suppliers (60,000) cover closing inventory and other items, so excluded from COGS
• Gross profit = 95,000 - 50,000 = 45,000

Why D is correct:

• Gross profit formula requires accruing unpaid costs to suppliers as part of COGS under accrual accounting principles.

Why the others are wrong:

• A: Equals amount owing by customers, ignoring full sales and costs.
• B: Equals closing inventory, a balance sheet item not profit.
• C: Equals cash receipts minus cash payments, failing accrual adjustments.

Final answer: D