b. Determine the inventory balances at the end of the first month of operations. Sorensen Manufacturing Company Inventory Balances For the Month Ended January 31 Inventory balances on January 31: Materials Work in process Finished goods 36,000 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 $40,000 of materials. b. Used $30,800 of direct materials in production. C. Incurred $46,000 of direct labor wages. d. Incurred $64,800 of factory overhead. e. Transferred $107,600 of work in process to finished goods. f. Sold goods for $192,400. g. Sold goods with a cost of $85,600. h. Incurred $49,200 of selling expense. i. Incurred $21,600 of administrative expense. Using the information given, complete the following: a. Prepare the January income statement for Sorensen Manufacturing Company. Sorensen Manufacturing Company Income Statement For the Month Ended January 31 Selling expenses 192,400 Cost of goods sold 85,600 Gross profit $ 106,800 Operating expenses: Selling expenses 49,200 Administrative expenses 21,600 Total operating expenses 70,800 Net income 36,000