Boats Corp. manufactures the boats. Production and sales data for the most recent year are as follows (no beginning inventory):

Variable production costs $85 per boats

Fixed production costs $530,000

Variable selling & administrative costs $17 per boats

Fixed selling & administrative costs $480,000

Selling price $195 per boats

Production 21,200 boats

Sales 19,000 boats

Required:

a) Prepare an income statement using absorption costing

b) Calculate the amount to be reported for inventory in the year end absorption costing balance sheet