Preparation of journal entries and income statement for a manufacturing firm. Soft Touch, Inc., a glove manufacturer, showed the following amounts in its inventory accounts on January 1:

Soft Touch engaged in the following transactions during January:
(1) Acquired raw materials costing \(\$ 66,700\) on account.
(2) Issued, to producing departments, raw materials costing \(\$ 63,900\).
(3) Paid salaries and wages during January for services received during the month as follows:

(4) Calculated depreciation on buildings and equipment during January as follows:

(6) The cost of goods manufactured and transferred to the finished goods storeroom totaled \(\$ 270,870\).
(7) Sales on account during January totaled \(\$ 350,000\).
(8) A physical inventory taken on January 31 revealed a finished goods inventory of \(\$ 40,200\).

a. Present journal entries to record the transactions and events that occurred during January.

b. Prepare an income statement for Soft Touch, Inc., for January. Ignore income taxes.

Transcribed Image Text:

Raw Materials Inventory Work-in-Process Inventory Finished Goods Inventory. $ 20,000 105,000 38,000