Question

During 2020, Bonita Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Bonita for a lump sum of $77,805 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.

Type		No. of Chairs		Estimated Selling Price Each
Lounge chairs		520		$90
Armchairs		390		80
Straight chairs		910		50

During 2020, Bonita sells 260 lounge chairs, 130 armchairs, and 156 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? (Round cost per chair to 2 decimal places, e.g. 78.25 and final answer to 0 decimal places, e.g. 5,845.)

Gross profit realized during 2020		$enter a dollar amount
Amount of inventory of unsold straight chairs		$enter a dollar amount

Answer 1

(a)	(b)	(c)	(d) = (b)*(c)	(e) = (Total Sales Price/123,500)*100	(f) =77,805*(e)	(g) = (f)/(d)
	Number of Chairs	Estimated Selling Price	Total Sales Price	Percentage	Cost allocated to Chairs	Cost per Chair
Lounge Chairs	520	90	46,800	37.894%	29,483.4267	62.99
Arm Chairs	390	80	31,200	25.263%	19,655.87715	62.99
Straight Chairs	910	50	45,500	36.842%	28,664.9181	62.99
			123,500

Answer to Part 1
(a)	(b)	(c)	(d) = (b)*(c)	(e)	(f) = (b)*(e)	(g) = (d) - (f)
	Number of Units Sold	Selling price per Child	Total Sales	Cost per Chair	Total Cost	Gross Profit
Lounge Chairs	260	90	23,400	62.99	16,377.4	7022.6
Arm Chairs	130	80	10,400	62.99	8,188.7	2,211.3
Straight Chairs	156	50	7800	62.99	9,826.44	(2026.44)
Total Gross Profit	7207.46

Answer to Part 2
(a)	(b)	(c)	(d) = (b) - (c)	(e)	(f) = (d)*(e)
	Bought	Number of Units Sold	Unsold	Cost per Chair	Total Cost
Straight Chairs	910	156	754	62.99	47,494.46

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