Amazon.com: Suits Sea? Graded wp HN.7/ch9) wil yPLUS ? ? o https://edigen.wileyp

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Amazon.com: Suits Sea? Graded wp HN.7/ch9) wil yPLUS ? ? o https://edigen.wileypius com/edugermimainami Kieso, Intermediate Accounting, 16e BACK Question 1 During 2017, Headland Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Headland for al and wishes to dispose of its entire stock. Three types of chairs are included in the carload. The three types and t ump sum of s55,700 because it is discontinuing manufacturing operations e three types and the estimated selling price for each are listed below. Estimated Selling pric Each Type No, of Chairs Lounge chairs500 Armchairs Straight chairs 700 $90 During 2017, Headland sells 100 lounge chairs, 110 armchairs, and 130 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? (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 2017 Amount of inventory of unsold straight chairs Question Attempts: O of 6 used SAVE HIR LA?ER

Explanation / Answer

When inventory is sold as a lump sum, the value of inventory is determined through sale value at split off. The following table shows the calculations

Calculations A B C = A x B D = C / $112,000 E F = D x E G = F / A H = B - G I J = H x I K = A - I L = G x K Type No, of chairs Estimated selling price Sales value % of Total Total cost Cost allocation Cost per chair Gross profit per unit Units sold Gross profit Unsold chairs Closing Inventory Lounge chairs 500 90          45,000 40.18% 55700 22379.46 44.76 45.24 100 4524.11 400 17903.57 Armchairs 400 80          32,000 28.57% 55700 15914.29 39.79 40.21 110 4423.57 290 11537.86 Straight chairs 700 50          35,000 31.25% 55700 17406.25 24.87 25.13 130 3267.41 570 14173.66 Total        112,000 100%        55,700      12,215          43,615

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