Chapter $16$ Homework

Financial Statements of a Manufacturing Firm

The following events took place for Rockhaven Biking Inc. during February, the first month of operations as a producer of road bikes:

Purchased $$380,200$ of materials.

Used $$327,000$ of direct materials in production.

Incurred $$280,000$ of direct labor wages.

Applied factory overhead at a rate of $75\%$ of direct labor cost.

Transferred $$784,300$ of work in process to finished goods.

Sold goods with a cost of $$749,000.$

Revenues earned by selling bikes, $$1,340,700.$

Incurred $$322,100$ of selling expenses.

Incurred $$119,800$ of administrative expenses.

a$.$ Prepare the income statement for Rockhaven Biking Inc. for the month ending February $28.$

Rockhaven Biking Inc.

Income Statement

For the Month Ended February $28$

Line Item Description

Amount

Amount

Selling and administrative expenses:

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