Question

During 2020, Concord Furniture Limited purchased a railway carload of wicker chairs. The manufacturer of the chairs sold them to Concord for a lump sum of $58,600, because it was discontinuing manufacturing operations and wanted 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 as follows: Type No. of Chairs Estimated Selling Price per Chair Lounge chairs 490 $93 Straight chairs 650 53 Armchairs 380 80 Concord estimates that the costs to sell this inventory would be $4 per chair. During 2020, Concord sells 410 lounge chairs, 280 armchairs, and 160 straight chairs, all at the same prices as estimated. At December 31, 2020, the remaining chairs were put on sale: the lounge chairs at 25% off the regular price, the armchairs at 30% off, and the straight chairs at 40% off. All were expected to be sold at these prices.

What is the total cost of the chairs remaining in inventory at the end of 2020, using the relative sales value method? (Round percentages to 1 decimal place, e.g. 52.7% and all other amounts to 2 decimal places, e.g. 52.75.) Total costs $

What is the net realizable value of the chairs remaining in inventory? (Round answer to 2 decimal places, e.g. 52.75.) Net realizable value $

What is the appropriate inventory value to be reported on the December 31, 2020 statement of financial position, assuming the lower of cost and NRV is applied on an individual item basis? (Round answer to 2 decimal places, e.g. 52.75.) Inventory value $

Answer 1

working Notes Calculating the Cost per chair Total Sale Sale price No.of chairs price 11 price perchair / Relative Tool & Cost I sales - Cast cost allocated Totion to chairs in allocation by 158600x b) = 26184 41-3% 24201.8 I us.570 Lounge chairs straight chairs 650 53 34,450 18,283.2 28.12 31.2% 27-5% 1 16 115.0 Arm chain 380 NO 30,400 42.61 110420 S e 58.600 a * Relative sales price lost Total sales price Lounge = 45, Sto, se too chain - lourd' loo straight = 34;450 asetes chairs (60420 41-3% augt 31.2% 28283 : 27.5% 133 som - 30,400 - 30,400. 88 Chairs 110420 a chairs Type Noosf Chairs sold Total, I cost of chairs a Chairs Remaining 79-b20) Phair Lounge chairs closing Invent (cord) 3999 ५१० 410 80 49.34 3951.2 straight chairs 6 So 280 370 28.3 10408. 9330-2 Arm 380 160 220 42.410 chairs Scanned with CamScanner 23,689.5

o Net Realisable value of the Inventory chairs remaining in Chairs Type No. of chairs Remaining Discounted sale Net Selling Total Net Realisable I price price price axd) Lounge 69.75 53.39 16.36 (93x(100-25)77 1308.8 chairs straight chairs 370 . 37. 1 32.13 4.97 [53x(100-30)%] 1838.9 - 48 46.41 1.59 349.8 Am 220 chairs 3497.5 Total AS 23,689.5 Total cost of Remaining chairs = Tot Net Realisable value of chairs = 3,497.5 Cost of NRV whichever is lower NRV = $.3,497.5 Shank you CamScanner