Question - During 2017, Martinez Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Martinez for a lump sum of $56,800 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 300 $90
Armchairs 300 80
Straight chairs 600 50
During 2017, Martinez sells 200 lounge chairs, 100 armchairs, and 130 straight chairs.
What is the amount of gross profit realized during 2017? What is the amount of inventory of unsold straight chairs on December 31, 2017?