Question
In: Accounting
Exercise 9-10 During 2017, Bridgeport Furniture Company purchases a carload of wicker chairs. The manufacturer sells...
Exercise 9-10
During 2017, Bridgeport Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Bridgeport for a lump sum of $55,000 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.
|
Type |
No. of Chairs |
Estimated Selling |
|||
| Lounge chairs | 500 | $90 | |||
| Armchairs | 400 | 80 | |||
| Straight chairs | 800 | 50 | |||
During 2017, Bridgeport sells 200 lounge chairs, 100 armchairs, and
140 straight chairs.
What is the amount of gross profit realized during 2017? What is
the amount of inventory of unsold straight chairs on December 31,
2017?
Solutions
Expert Solution
| Number of chairs | value of chairs | value assigned to individual chairs | COST PER chair | |
| Lounge chairs | 500 | 500*90= 45000 | 55000*45000/117000= 21154 | 21154/500 =$ 42.308 |
| Armchairs | 400 | 400*80=32000 | 55000*32000/117000= 15043 | 15043/400=$ 37.6075 |
| straight chairs | 800 | 800*50= 40000 | 55000*40000/117000= 18803 | 18803/800= 23.50375 |
| 117000 |
a)Gross Profit : unit sold [price -cost]
[200(90-42.308)]lounge + [100(80-37.6075)]arm +[140(50-23.50375)]
9538.4+ 4239.25+ 3709.475
= $ 17487.125 [rounded to 17487.13]
b)amount of inventory of unsold straight chairs on December 31, 2017 = [800-140]*23.50375
= $ 15512.475 [rounded to 15512.48]
ekkarill92 answered 1 year agoRelated Solutions
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