Empire Company is a manufacturer of smart phones. Its controller resigned in October 2020. An inexperienced assistant accountant has prepared the following income statement for the month of October 2020. $794,700 EMPIRE COMPANY Income Statement For the Month Ended October 31, 2020 Sales revenue Less: Operating expenses Raw materials purchases $264,000 Direct labor cost 188,500 Advertising expense 91,300 Selling and administrative salaries 77,600 Rent on factory facilities 63,000 Depreciation on sales equipment 45,200 Depreciation on factory equipment 32,200 Indirect labor cost 29.300 Utilities expense 11.900 Insurance expense 8,400 811.400 Net loss $(16,700) Prior to October 2020, the company had been profitable every month. The company's president is concerned about the accuracy the income statement. As her friend, you have been asked to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired additional information as follows. 1. Inventory balances at the beginning and end of October were: October 1 October 31 Raw materials $20,000 $35,800 19,000 14,000 Work in process Finished goods 29.700 53,400 2. Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities. EMPIRE COMPANY Cost of Goods Manufactured Schedule Work in Process Inventory, October 1 Direct Materials Used Raw Materials Inventory, October 1 V > > e Textbook and Media EMPIRE COMPANY Income Statement Sales Revenue C > V > C > A )