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.

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?

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No. of Chairs 400 300 Estimated Selling Price Each Type Lounge chairs $90 Armchairs 80 Straight chairs 700 50