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 $643,300 of materials. Used $553,200 of direct materials in production. Incurred $476,000 of direct labor wages. Applied factory overhead at a rate of 70% of direct labor cost. Transferred $1,307,900 of work in process to finished goods. Sold goods with a cost of $1,286,600. Revenues earned by selling bikes, $2,303,000. Incurred $553,200 of selling expenses. Incurred $205,900 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
Finished goodsGross profitOperating incomeFactory overheadRevenues		$
Cost of goods manufacturedCost of goods soldOperating incomeRevenuesSelling expenses		$
Administrative expensesCost of goods soldGross profitOperating incomeRevenues		$
Selling and administrative expenses:	blank	blank
Cost of goods soldFactory overheadMaterialsSelling expensesWork in process	$
Administrative expensesCost of goods soldDirect laborRevenuesWork in process	$	blank
Total selling and administrative expenses	blank	Total selling and administrative expenses
Administrative expensesCost of goods soldOperating incomeOperating lossWork in process		$

b. Determine the inventory balances on February 28, the end of the first month of operations.

Materials inventory, February 28	$
Work in process inventory, February 28	$
Finished goods inventory, February 28	$