Financial statements of a manufacturing firm OBJ. 2 The following events took place for Chi-Lite Inc. during
Question:
Financial statements of a manufacturing firm OBJ. 2 The following events took place for Chi-Lite Inc. during June 2016, the first month of operations as a producer of road bikes:
Purchased $400,000 of materials.
Used $343,750 of direct materials in production.
Incurred $295,000 of direct labor wages.
Applied factory overhead at a rate of 75% of direct labor cost.
Transferred $815,000 of work in process to finished goods.
Sold goods with a cost of $789,000.
Sold goods for $1,400,000.
Incurred $316,000 of selling expenses.
Incurred $125,000 of administrative expenses.
a. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method.
b. Determine the inventory balances at the end of the first month of operations.
Step by Step Answer:
Financial And Managerial Accounting
ISBN: 9781305267831,9781305267848
13th Edition
Authors: Carl S. Warren , James M. Reeve , Jonathan Duchac