Mapleton Corporation builds sailboats. On January 1, Year 3, the company had the following account balances: $48,000 for both cash and common stock, Boat 25 was started on February 10 and finished on May 31. To build the boat, Mapleton had incurred cash costs of $8,640 for labor and $7,500 for materials. During the same period, Mapleton paid $11,160 cash for actual manufacturing overhead costs. The company expects to incur $210,600 of indirect overhead cost during Year 3. The overhead is allocated to jobs based on direct labor cost. The expected total labor cost for the year is $162,000. Mapleton 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 Mapleton's business events. The first row shows beginning balances. b. If Mapleton desires to earn a profit equal to 20 percent of cost, for what price should it sell the boat? 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? d. is the amount of inventory you calculated in Requirement c the actual or the estimated cost of the boat? Complete this question by entering your answers in the tabs below.
Mapleton Corporation builds sailboats. On January 1, Year 3, the company had the following account balances: $48,000 for both cash and common stock, Boat 25 was started on February 10 and finished on May 31. To build the boat, Mapleton had incurred cash costs of $8,640 for labor and $7,500 for materials. During the same period, Mapleton paid $11,160 cash for actual manufacturing overhead costs. The company expects to incur $210,600 of indirect overhead cost during Year 3. The overhead is allocated to jobs based on direct labor cost. The expected total labor cost for the year is $162,000. Mapleton uses a just-in-time inventory management system. Consequently, it does not have raw materials inventory. Raw materials purchases are recorded directly in the Work in Process Inventory account. Required a. Use the horizontal financial statements model to record Mapleton's business events. The first row shows beginning balances. b. If Mapleton desires to earn a profit equal to 20 percent of cost, for what price should it sell the boat? c. If the boat is not sold by year-end, what amount would appear in the Work in Process Inventory and Finished Goods Inventory on the balance sheet for Boat 25? d. is the amount of inventory you calculated in Requirement c the actual or the estimated cost of the boat? Complete this question by entering your answers in the tabs below.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:$
Mapleton Corporation builds sailboats. On January 1, Year 3, the company had the following account balances: $48,000 for both cash
and common stock, Boat 25 was started on February 10 and finished on May 31. To build the boat, Mapleton had incurred cash costs of
$8,640 for labor and $7,500 for materials. During the same period, Mapleton paid $11,160 cash for actual manufacturing overhead
costs. The company expects to incur $210,600 of indirect overhead cost during Year 3. The overhead is allocated to jobs based on
direct labor cost. The expected total labor cost for the year is $162,000.
Mapleton 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 Mapleton's business events. The first row shows beginning balances.
b. If Mapleton desires to earn a profit equal to 20 percent of cost, for what price should it sell the boat?
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?
d. is the amount of inventory you calculated in Requirement c the actual or the estimated cost of the boat?
Complete this question by entering your answers in the tabs below.
Required A
Required B Required C
Use the horizontal financial statements model to record Mapleton's business events. The first row shows beginning balances.
Note: Do not round intermediate calculations. Enter any decreases to account balances with a minus sign.
Balance Sheet
Cash
48,000+
+
♦
Work in
Process
Assets
Required D
Finished
Goods
Manufacturing
Overhead
Liabilities
Stockholders' Equity
Retained
Earnings
Common
Stock
48,000.
+
Prov
Revenue
Income Statement
Required >
2 of 6
Expenses
blout
Net Income
Microso
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