During 2020, Whispering Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Whispering for a lump sum of $107,730 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   720   $90   Armchairs   540   80   Straight chairs   1,260   50   During 2020, Whispering sells 360 lounge chairs, 180 armchairs, and 216 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?

Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter17: Advanced Issues In Revenue Recognition
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During 2020, Whispering Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Whispering for a lump sum of $107,730 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

  720   $90  

Armchairs

  540   80  

Straight chairs

  1,260   50  


During 2020, Whispering sells 360 lounge chairs, 180 armchairs, and 216 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?

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