Financial Statements of a Manufacturing Firm The following events took place for Sorensen Manufacturing Company...
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Accounting
Financial Statements of a Manufacturing Firm
The following events took place for Sorensen Manufacturing Company during January, the first month of its operations as a producer of digital video monitors:
Purchased $250,000 of materials.
Used $180,000 of direct materials in production.
Incurred $450,000 of direct labor wages.
Incurred $180,000 of factory overhead.
Transferred $760,000 of work in process to finished goods.
Sold goods for $1,200,000.
Sold goods with a cost of $675,000.
Incurred $215,000 of selling expense.
Incurred $125,000 of administrative expense.
Using the information given, complete the following:
Question Content Area
a. Prepare the January income statement for Sorensen Manufacturing Company.
Line Item Description
Amount
Amount
Revenues
?
Cost of goods sold
?
Gross profit
?
Operating expenses:
Selling expenses
?
Administrative expenses
?
Total operating expenses
?
Net income
?
b. Determine the inventory balances at the end of the first month of operations.
Inventory balances on January 31:
Amount
Materials
?
Work in process
?
Finished goods
?
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