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:

(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 3 1 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.

Transcribed Image Text:

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