Class Example $-$ Simple Case

A manufacturing plant has one production department and uses process costing. On January $1,$ all inventories had zero balance. There is never any work$-$in$-$process inventory. During January, the company incurred the following costs $($company paid cash for all items except depreciation$)$:

$$40,000$ direct materials purchased and used in production

$25,000$ direct labor

$15,000$ electric $($plant$)$

$20,000$ depreciation on production equipment

$7,000$ salaries of sales force

During January, the company produced $1,000$ units. Of these, $600$ units were sold for $$130$ per unit $($cash$).$

Required

$(1)$ Provide all financial accounting entries for January.

$(2)$ Provide GAAP income statement for January.

$(3)$ What is the balance in finished goods at end of January?

$5$