E9-8B (Relative Sales Value Method) During 2014, Galarraga Furniture Company purchases a carload of wicker chairs.

E9-8B (Relative Sales Value Method) During 2014, Galarraga Furniture Company purchases a carload of wicker chairs. The manufacturer sells the chairs to Galarraga for a lump sum of $5,985, 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                         80                                        $45

Armchairs                               60                                          40

Straight chairs                      140                                          25

During 2014, Galarraga sells 40 lounge chairs, 20 armchairs, and 24 straight chairs.

Instructions

What is the amount of gross profit realized during 2014? What is the amount of inventory of unsold

straight chairs on December 31, 2014?