Question

Financial Statements of a Manufacturing Firm The following events took place for Digital Vibe Manufacturing Company during January, the first month of its operations as a producer of digital video monitors: a. Purchased $54,300 of materials b. Used $41,800 of direct materials in production. C. Incurred $62,400 of direct labor wages. d. Incurred $88,000 of factory overhead. e. Transferred $146,100 of work in process to finished goods. f. Sold goods for $261,200. g. Sold goods with a cost of $116,200. h. Incurred $66,800 of selling expenses. I. Incurred $29,300 of administrative expense. Using the information given, complete the following: a. Prepare the January income statement for Digital Vibe Manufacturing Company. Digital Vibe Manufacturing Company Income Statement For the Month Ended January 31 Selling expenses Cost of goods sold Gross profit Operating expenses: Selling expenses Administrative expenses Total operating expenses

Answer 1

SOLUTION:

PART-1)
Income Statement
For the month ended January 31
Revenues	261,200
Cost of goods sold	116,200
Gross profit	145,000
Operating expenses:
Selling expenses	66,800
Administrative exp	29,300
Total operating expenses	96,100
Net income	48,900
PART-2)
Materials (54,300 - 41,800)	12,500
Work in process (41,800 + 62,400 + 88,000 - 146,100)	46,100
Finished goods (146,100 -116,200)	29,900