a) Compute cost of goods manufactured.

b) Compute cost of goods sold.

1. c)Prepare a correct income statement for October 2017.

Empire Company is a manufacturer of smart phones. Its controller resigned in October 2020. An inexperienced assistant accountant has prepared the following income statement for the month of October 2020. EMPIRE COMPANY Income Statement For the Month Ended October 31, 2020 Sales revenue $794,300 Less: Operating expenses Raw materials purchases $264,700 Direct labor cost 192,000 Advertising expense 92,000 Selling and administrative salaries 76,100 Rent on factory facilities 62,300 Depreciation on sales equipment 44,100 Depreciation on factory equipment 32,900 Indirect labor cost 28,400 Utilities expense 12,600 Insurance expense 8,600 813,700 Net loss $(19,400) Prior to October 2020, the company had been profitable every month. The company's president is concerned about the accuracy of the income statement. As her friend, you have been asked to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired additional information as follows. 1. Inventory balances at the beginning and end of October were: Raw materials Work in process Finished goods October 1 $19,100 19,600 29,500 October 31 $35,700 14,300 53,500 2. Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities