EBOOK Financial Statements of a Manufacturing Firm The following events took place for Focauit Inc. during July 2012, the first month of operations as a producer of road bikes Purchased 5485,800 of materials Uved $417,600 of direct materials in production Incurred $360,000 of direct labor wages Applied factory overhead at a rate of 70% of direct labor cost Transferred $988,600 of work in process to finished goods Sold goods with a cost of $957,000 Sold goods for $1,713,000 Incurred $411,500 of selling expenses Incurred $153,100 of administrative expenses a. Prepare the July income statement for Focauit. Assume that Focault uses the perpetual inventory method Focault Inc. Income Statement For the Month Ended July 31, 2012 Revenues 1.71.000 Cost of goods sold 9570 756.000 Gross profit Selling and administrative expenses Selling expenses Administrative expenses 411,500 1100 566 Total selling and administrative expenses Income from operations 1,400 * pter 19) eBook Administrative expenses 153,100 564,60 Total selling and administrative expenses Income from operations 191.400 Feattack Check My Work 3. Both product and period costs must be reported on the income statement and are necessary to measure income. b. Determine the inventory balances at the end of the first month of operations. 485,800 X Materials inventory, July 31 Work in process inventory, July 31 Finished goods inventory, July 31 Feedback Check My Work b. Set up T accounts for materials, work in process, and finished goods inventory accounts. Feedback CHOW WON Partially correct