PLEASE SHOW CALCULATIONS! Thank you!

Vernon Corporation builds sailboats. On January 1, 2015, the company had the following account balances: $70,000 for both cash and common stock. Boat 25 was started on February 10 and finished on May 31. To build the boat, Vernon had incurred cash costs of $5,800 for labor and $5,550 for materials. During the same period, Vernon paid $7,490 cash for actual manufacturing overhead costs. The company expects to incur $169,000 of indirect overhead cost during 2015. The overhead is allocated to jobs based on direct labor cost. The expected total labor cost for the year is $130,000. Vernon uses a just-in-time inventory management system. Consequently, it does not have raw materials inventory. Raw materials purchases are recorded directly in the Work in Process Inventory account.

Required: a. Use the horizontal financial statements model, to record Vernons business events. The first row shows beginning balances. (Enter any decreases to account balances with a minus sign. Do not round intermediate calculations and round final answers to the nearest whole dollar amount.)

cash

+

WIP

+

Finished Goods

+

Manu. OH

=

C.S.

+

Ret Earn.

Revenue

-

Expenses

=

Net Income

+

+

+

+

+

+

+

+

b. If Vernon desires to earn a profit equal to 20 percent of cost, for what price should it sell the boat? (Do not round intermediate calculations.)

c. If the boat is not sold by year-end, what amount would appear in the Work in Process Inventory and Finished Goods Inventory on the balance sheet for Boat 25? (Do not round intermediate calculations and round final answers to the nearest whole dollar amount.)

Work In Progress Inventory
Finished Goods Inventory