Eg.10 (LO 3) (Relative Sales Value Method) During 2020, Pretenders Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Pretenders for a lump sum of $59,850 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. No. of Chairs Type Lounge chairs Armchairs Estimated Selling Price Each $90 400 300 80 Straight chairs 700 50 During 2020, Pretenders sells 20o lounge chairs, 100 armchairs, and 120 straight chairs. Instructions 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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- During 2020, Sheffield Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Sheffield for a lump sum of $41,895 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. \table[[Type,No. of Chairs,\table[[Estimated Selling],[Price Each]]],[Lounge chairs,280,$90During 2020, Pretenders Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Pretenders for a lump sum of $59,850 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. 000 Type000 No. of Chairs Estimated Selling Price Each Lounge chairs 400000 000 $9000000000 Armchairs 000 300000 000 8000000000 Straight chairs 000 700000 000 5000000000 During 2020, Pretenders sells 200 lounge chairs, 100 armchairs, and 120 straight chairs. Instructions What is the amount of gross profit realized during 2020? What is the amount of inventory of unsold straight chairs on December 31, 2020?During 2020, Sarasota Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Sarasota 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 SellingPrice Each Lounge chairs 720 $90 Armchairs 540 80 Straight chairs 1,260 50 During 2020, Sarasota 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? (Do not round relative sales price. 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 2020 ? Amount of inventory of unsold straight chairs ?
- During 2020, Sage Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Sage for a lump sum of $83,790 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 SellingPrice Each Lounge chairs 560 $90 Armchairs 420 80 Straight chairs 980 50 During 2020, Sage sells 280 lounge chairs, 140 armchairs, and 168 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? (Round cost per chair to 2 decimal places, e.g. 78.25 and final answer to 0 decimal places, e.g. 5,845.)During 2020, Martinez Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Martinez for a lump sum of $113,715 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 SellingPrice Each Lounge chairs 720 $90 Armchairs 540 80 Straight chairs 1,260 50 During 2020, Martinez sells 380 lounge chairs, 190 armchairs, and 228 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? (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 2020 $enter a dollar amount Amount of inventory of unsold straight chairs $enter a dollar…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 SellingPrice 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?
- 8. On October 1, 2021, Loving Company approved a formal plan to sell a business segment. The sale will occur on April 1, 2022. The segment’s revenue and expenses for 2021 were P30,000,000 and P32,000,000, respectively. On December 31, 2021, the carrying amount of the assets of the segment was P10,000,000 and the fair value less costs of disposal was P9,600,000. The income tax rate is 25%. What amount should be reported as income/(loss) from discontinued operation for 2021? A. (2,400,000) B. (2,000,000) C. (1,800,000) D. 0 E. None of themMorley Manufacturing has notes receivable that have a fair value of P810,000 and a carrying amount of P620,000. Morley decides on December 31, 2021, to use the fair value option for these recently-acquired receivables. Which of the following statements is correct regarding the election of the fair value option by Morley? a. Morley can elect to use the fair value option or amortized cost at each statement of financial position date. b. Morley reports the receivables at fair value, with any unrealized holding gains and losses reported as a separate component of comprehensive income. c. The unrealized holding gain is the difference between the fair value and the carrying amount. d. All of the choices are correct regarding the fair value option.Yellow Company, a distributor of machinery, bought a machine from the manufacturer in November 2020 for P500,000. On December 30, 2020, the entity sold this machine for P750,000 under the following terms: 2% discount if paid within 30 days, 1% discount if paid after 30 days, or payabl e in full within ninetydays if not paid within the discount periods. However, the customer had the right to return this machine to Yellow Company if it was unable to resell the machine before the expiration of the ninety-day payment period, in which case the customer’s obligation to Yellow Company would be canceled. In the net sales for the year ended december 31,2020, what amount should be included for the sale of the machine? a. 750,000 b. 735,000 c. 742,500 d. 0
- During 2021, Tartarus Company signed a noncancellable contract to purchase 500 sacks of rice at P900 per sack with delivery to be made in 2022. On December 31, 2021, the price of rice had fallen to P850 per sack. On May 9, 2022, Tartarus Company accepts delivery of rice when the price is P880 per sack. What amount of recovery of loss on purchase commitment should Tartarus recognize on May 9, 2022On January 1, 2020, Laguna Company sold equipment costing P836,000 with accumulated depreciation of P352,000 on the date of sale. Laguna received as consideration for the sale, a P880,000 noninterest-bearing note due January 1, 2023. There was no established exchange price for the equipment and the note had no ready market. The prevailing rate of interest for a note of this type at January 1, 2020 was 10%. The present value of 1 at 10% for three periods is 0.75. In Laguna Company's statement of comprehensive income, how much should be reported as interest income for 2020?On January 1, 2025, Manatee Corporation sold a warehouse that cost $411,000 and that had accumulated depreciation of $163,000 on the date of sale. Manatee received as consideration a $400,000 non-interest-bearing note due on January 1, 2029. There was no established exchange price for the building, and the note had no ready market. The prevailing rate of interest for a note of this type on January 1, 2025, was 8%. At what amount should the gain from the sale of the building be reported? using the time value of money method