Question 1 During 2017, Culver Furniture Company purchases a carload of wicker c

Question

Question 1 During 2017, Culver Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Culver for a lump sum of $60,800 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 Estimated Price Each $90 80 50 Selling Type Lounge chairs Armchairs Straight chairs No. of Chairs 300 200 700 During 2017, Culver sells 100 lounge chairs, 100 armchairs, and 100 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 O decimal places, e.g. 5,845.) Gross profit realized during 2017 Amount of inventory of unsold straight chairs Question Attempts: 0 of 5 used SAVE FOR LATER SUBMIT ANSWER

Explanation / Answer

LOUNGE CHAIRS ARM CHAIRS STRAIGHT CHAIRS TOTAL Number of units Purchased 300 200 700 Selling price per unit 90 80 50 Expectd sales of purchased units 27000 16000 35000 78,000 Less: Total ocst of purchase 60,800 GROSS PROFIT 17,200 Gross Profit ratio = Gross profit / sales *100 17200/78000*100 = 22.05% Gross profit earned LOUNGE CHAIRS ARM CHAIRS STRAIGHT CHAIRS TOTAL Sales units 100 100 100 300 Selling price per unit 90 80 50 Less: Gross profit @ 22.05% of Selling price 19.845 17.64 11.025 Total Gross Profit realized 1984.5 1764 1102.5 4851 Valuation of ending Inventory LOUNGE CHAIRS ARM CHAIRS STRAIGHT CHAIRS TOTAL Number of units Purchased 300 200 700 1200 Less: Sold Units 100 100 100 300 Unsold Ending inventory 200 100 600 900 Selling price per chair 90 80 50 Less: Gross profit per unit 19.845 17.64 11.025 Cost price per unit 70.155 62.36 38.975 Valuation of Closing inventory 14031 6236 23385 43652 (Unsold ending inventory units@cost price per unit)

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