Financial Statements of a Manufacturing Firm The following events took place for Sorensen Manufacturing Company during January, the first month of its operations as a producer of digital video monitors: a. Purchased $250,000 of materials. b. Used $180,000 of direct materials in production. c. Incurred $450,000 of direct labor wages. d. Incurred $180,000 of factory overhead. e. Transferred $760,000 of work in process to finished goods. f. Sold goods for $1,200,000. g. Sold goods with a cost of $675,000. h. Incurred $215,000 of selling expense. i. Incurred $125,000 of administrative expense. Using the information given, complete the following: a. Prepare the January income statement for Sorensen Manufacturing Company. Sorensen Manufacturing Company Income Statement For the Month Ended January 31 Revenues 1,200,000 Cost of goods sold 675,000 Gross profit 525,000 Operating expenses: Selling expenses $ 215,000 Administrative expenses 125,000 340,000 Total operating expenses Net income 185,000 Feedback Check My Work a. Use "f, g, h, and i" in preparing the income statement. b. Determine the inventory balances at the end of the first month of operations. Sorensen Manufacturing Company Inventory Balances For the Month Ended January 31 Inventory balances on January 31: Materials 70,000 Work in process 50,000 Finished goods 85,000