Question

During 2020, Sarasota Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Sarasota for a lump sum of $131,670 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.Col1 Type Lounge chairs Armchairs Straight chairsCol2 No. of Chairs 880 660 1540Col3 Estimated Selling Price Each $90 80 50During 2020, Sarasota sells 440 lounge chairs, 220 armchairs, and 264 straight chairs.
What is the amount of gross profit realized during 2020? What is the amount of inventory of unsold straight chairs on December 31, 2020?

Answer 1

Answer

The answer and procedures of the exercise are attached in the following archives.

Step-by-step explanation:

Gross profit = Sales - Cost of goods sold

= (440 x 90 + 220 x 80 + 264 x 50) - (440 x 56.7 + 220 x 50.4 + 264 x 31.5)

= (39,600 + 17,600 + 13,200) - (24,948 + 11,088 + 8,316)

= 70,400 - 44,352

= $26,048

Ending inventory schedule attached in the excel archive

You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.