Question

eBook Show Me How Calculator Financial Statements of a Manufacturing Firm The following events took place for Sorensen Manufacturing Company during January, the first mon a. Purchased $250,000 of materials. b. Used $180,000 of direct materials in production. c. Incurred $450,000 of direct labor wages. d. Incurred $180,000 of factory overhead. e. Transferred $760,000 of work in process to finished goods. f. Sold goods for $1,200,000 g. Sold goods with a cost of $675,000. h. Incurred $215,000 of selling expense. I. Incurred $125,000 of administrative expense. Using the information given, complete the following: a. Prepare the January income statement for Sorensen Manufacturing Company. Sorensen Manufacturing Company Income Statement For the Month Ended January 31 Operating expenses: Total operating expenses b. Determine the inventory balances at the end of the first month of operations Check My Work All work saved.

Answer 1

a.

Sales		$1,200,000
Cost of goods sold		$675,000
Gross profit		$525,000
Operating expenses:
Administrative expense	$125,000
Selling expense	$215,000
Total operating expenses		$340,000
Net income		$185,000

b.

Material = $250,000 - $180,000 = $70,000

Work in process = $180,000 + $450,000 + $180,000 - $760,000 = $50,000

Finished goods = $760,000 - $675,000 = $85,000