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 $6,600 for labor and $5,650 for materials. During the same period, Vernon paid $10,530 cash for actual manufacturing overhead costs. The company expects to incur $192,000 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 $120,000.

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.)

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.)

Desired price=___

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.)

d.

Is the amount of inventory calculated in requirement c the actual or the estimated cost of the boat?

_	Estimated cost
_	Actual cost

Required: a. Use the horizontal financial statements model, to record Vernon's 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.) Equity Assets Work in Finished Manufacturing Common Retained Cash Revenue Expense Overhead Stock Goods Process earnings +1 +1 +1 70,000 70,000 Net Income