Question

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: a. Purchased $230,000 of materials. b. Used $165,600 of direct materials in production. C. Incurred $414,000 of direct labor wages. d. Incurred $165,600 of factory overhead. e. Transferred $699,200 of work in process to finished goods. f. Sold goods for $1,104,000. g. Sold goods with a cost of $621,000. h. Incurred $197,800 of selling expense. 1. Incurred $115,000 of administrative expense. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Answer 1

Answers

Income Statement
Revenues [f]		$1,104,000
Cost of Goods Sold [g]		$621,000
Gross Profits		$483,000
Operating expenses:
Selling Expenses [h]	$197,800
Administrative expenses [i]	$115,000
Total Operating expense		$312,800
Net Income		$170,200

[b]

Material ($230000 'a' - $ 165600 'b')	$64,400
Work in Process ($165600 + 414000 + 165600 - 699200)	$46,000
Finished Goods ($699200 - 621000)	$78,200

[a]