Certain information about the statement of cost of goods manufactured and the income statement for the year ended December 31, 20X1, for Pauls Production, Inc., is given below:

Beginning inventory of finished goods, 105 percent of ending inventory
Work in process inventory, January 1, 95 percent of ending inventory
Net income	$	140,400
Raw materials inventory, January 1		25,300
Direct labor costs		109,000
Manufacturing overhead, 120 percent of direct labor costs
Work in process inventory, December 31		20,700
Finished goods inventory, December 31		32,600
Raw materials inventory, December 31		28,400
Net purchases of raw material		195,100
Net Sales		702,000

Required: 1. Prepare a statement of cost of goods manufactured for the year. 2. Prepare an income statement for the year. Analyze: Did total inventories for the business increase or decrease during the year? By what amount?