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Teal Mountain Company is a manufacturer of smartphones. Its controller resigned in October 2022. An inexperienced saltant accountant has prepared the following income statement for the month of October 2022 5764,400 Teal Mountain Company Income Statement For the Month Ended October 31, 2022 Sales revenue Less: Operating expenses Raw materials purchases 5258.720 Direct labor cost 186.200 Advertising expense 88.200 Selling and administrative salaries 73.500 Rent on factory facilities 58.800 Depreciation on sales equipment 44 100 Depreciation on factory equipment 30,380 Indirect labor cost 27.440 Utilities expense 11.760 Insurance expense 7.840 786,940 Netloss $122.540) Prior to October 2022, the company had been profitable every month. The company's president is concerned about the accuracy of the income statement As her friend, you have been asked to review the income statement and malo necessary corrections. After examining other manufacturing cost data, you have acquired additional information as follows. 1. Inventory balances at the beginning and end of October were: October 1 October 31 $28.420 $17.640 Raw materials Work in process Finished goods 19,600 13.720 29,400 49.000 2 Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities TEAL MOUNTAIN COMPANY Income Statement por uw wear ended to Sales Chet of Goode Manufactured > cost of Goode altale for Sale Less Fiched Goods inventory, October 31 Cost of Good Sold Grou Profit > Operating Expenses Selling and Administrative Salaries Depreciation Expense-Sales Equipment Insurance Open titles Expense > > Total Operating pentes S Net Income to

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