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Financial Statements of a Manufacturing Firm

The following events took place for Rockhaven Biking Inc. during February, the first month of operations as a producer of road bikes:

$$ Purchased $$377,000$ of materials.

$$ Used $$324,200$ of direct materials in production.

$$ Incurred $$280,000$ of direct labor wages.

$$ Applied factory overhead at a rate of $75\%$ of direct labor cost.

$$ Transferred $$781,600$ of work in process to finished goods.

$$ Sold goods with a cost of $$746,500.$

$$ Revenues earned by selling bikes, $$1,336,200.$

$$ Incurred $$321,000$ of selling expenses.

$$ Incurred $$119,400$ of administrative expenses.

Question Content Area

a$.$ Prepare the income statement for Rockhaven Biking Inc. for the month ending February $28.$

Rockhaven Biking Inc.

Income Statement

For the Month Ended February $28$

Line Item Description Amount Amount

Revenues

$Revenues

$1,336,200$

Cost of goods sold

Cost of goods sold

$746,500$

Gross profit

$Gross profit

$589,700$

Selling and administrative expenses: blank blank

Selling expenses

$Selling expenses

$321,000$

Administrative expenses

Administrative expenses

$119,400$

blank

Total selling and administrative expenses blank Total selling and administrative expenses

$440,400$

Operating income

$Operating income

$149,300.$ Determine the inventory balances on February $28,$ the end of the first month of operations.

Materials inventory, February $28$ fill in the blank $1$ of $3$$

$52,800$

Work in process inventory, February $28$ fill in the blank $2$ of $3$$

Finished goods inventory, February $28$ fill in the blank $3$ of $3$$

$35,100$

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