During 2013, Crawford Furniture Company purchases a carload of wicker chairs. Th

Question

During 2013, Crawford Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Crawford for a lump sum of $60,000 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below.

During 2013, Crawford sells 200 lounge chairs, 100 armchairs, and 120 straight chairs.

What is the amount of gross profit realized during 2013? What is the amount of inventory of unsold straight chairs on December 31, 2013? (Round ratios for computational purposes to 1 decimal place, e.g 78.7%, round cost per chair to 2 decimal places, e.g. $78.25 and final answers to 0 decimal places, e.g. $5,845.)

Type No. of Chairs Estimated Selling
Price Each Lounge chairs 400 $90 Armchairs 300 80 Straight chairs 800 50

Explanation / Answer

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During 2014, Pretenders Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Pretenders for a lump sum of $63,000 because it is discontinuing manufacturing operations and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and the estimated selling price for each are listed below.

During 2014, Pretenders sells 130 lounge chairs, 120 armchairs, and 100 straight chairs.

What is the amount of gross profit realized during 2014? What is the amount of inventory of unsold straight chairs on December 31, 2014? (Round cost per chair to 2 decimal places, e.g. 78.25 and final answer to 0 decimal places, e.g. 5,845.)

400*104 = 41600
300*92 = 27600
900*58 = 52200

Total Sales Price= 121400

Relative Sales Price :
41600/121400 * 63000 =21588.138
27600/121400 *63000 =14322.89
52200/121400 *63000=27088.96

cost per chair
21588.138/400 = 53.97
14322.89/300 = 47.74
27088.96/900 = 30.10



cost of sold = (130*53.97 + 120*47.74 + 100*30.10) = 15754.9
sales = 130*104 + 120*92 +100*58 = 30360

Profit = 30360-15754.9 = 14605.1


amount of inventory unsold straight = (900-100)* 30.1 = 24080

Type No. of Chairs Estimated Selling
Price Each Lounge chairs 400 $104 Armchairs 300 92 Straight chairs 900 58

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