The BarterCase

"Will that becash?"

Ben Sawyer had started handcrafting replicas of antique furniture as a retirement hobby, but at the urging offriendshe later opened a small shop to sell his products. It proved an immediate success, first with the "summer people"andthen with dealers, several of whom encouraged Ben to supplement his line of small tables and bookcases withlargerpieces. Ben decided to give it a try. After closing the shop for the winter, he worked in the basement of hishomedesigning an impressive mahogany sideboard and building two of them by the shop's spring reopening.Materialscosts (for wood) amounted to $700 for each; Ben's labor, priced at the going wage rate was $500 for each.Nooverhead costs wereincurred.

Although familiar with the market for casual "antique" furnishings, Ben was uncertain about an appropriate priceforhis sideboards. From a review of catalogues offering pieces mass-produced from cheaper woods, he concluded thatafigureof$3,000to$4,000wasaboutrightforhandcraftedmahogany.Accordingly,hepricedeachsideboardat

$3,000 ("and I'm ready to haggle if somebody's ready to buy," he told Mrs.Sawyer).

Within one week, Ben sold both sideboards with no haggling. He sold the first one on reopening day toWillBascomb, a dealer he knew well. "Beautiful work, Ben," said Will. "I want it, but I'm going to be short of cash forawhile. How about $1,000 down and the balance in quarterly installments for a year?" Done. Cash, anon-interest-bearing note, and sideboard changedhands.

The second sale came two days later. Seth Forester, Ben's wood supplier since the hobby-only days, dropped bytosee if Ben needed any materials and was captivated by the sideboard. "I don't remember when I last had $3,000inone lump," said Seth, "and I don't reckon to have it anytime soon. But craftsmen like you always need wood.Howabout if I pay you in wood-enough for mine and three others. Wood for sideboard, OK?""OK."

When Mrs. Sawyer returned from a week in Florida, Ben hastened to tell her the good news that both sideboardshadsold. "That's great, Ben!" she said. "How much did we get forthem?"

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REQUIRED

At what price should Sawyer recognize the second sideboardsale?