Question
During 2020, Novak Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Novak for a lump sum of $ 77,805because
During 2020, Novak Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Novak for a lump sum of $ 77,805because 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, Novak sells 260lounge chairs, 130armchairs, and 156straight 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?
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Accounting Principles
Authors: Jerry J. Weygandt, Paul D. Kimmel, Jill E. Mitchell
14th Edition
1119707110, 978-1119707110
