3b. Salem - Solution

a) Cash received (net of trade in) 14400-65007900 Used car 7100-8406260 Cost -12240 Profit SUM(C2:C4)1920 b) 6100-8405260 It would cost 6100 for a car that was ready to sell. Since this required 840 in repairs, the fair value is 6100 less the cost of repairs. c) 1200 His cost plus his opportunity cost d) New car sales: Selling price 14400 Transferred out price B75260 Cost of car C4-12240 Trade-in allowance -6500-6500 Gross profit SUM(C15:C18)920 Used car sales: Selling price 7100 Transferred in cost -C16-5260 Repair costs (paid to service dept) -1200 Gross profit SUM(C22:C24)640 Service dept Service revenue 1200 Cost -840 Gross profit SUM(B28:B29)360 Total: C19+C25+B301920