Chapter 12, Problem 5ESA

a.

To determine

Record the Company V business event using horizontal financial statements.

b.

To determine

State the price that must be fixed by the Company V to sells its boat.

c.

To determine

Identify the amount that must appear in the Work in Process Inventory and Finished Goods Inventory on the balance sheet for Boat 25 if the boat is not sold by the year–end.

d.

To determine

Explain whether the amount of inventory used for Requirement c is an actual or the estimated cost of the boat.

e.

To determine

Discuss when it is appropriate to use estimated inventory cost on a year-end balance sheet.