Financial Statements of a Manufacturing Firm

The following events took place for Salsa Inc. during June 2016, the first month of operations as a producer of road bikes:

Purchased $302,900 of materials.

Used $260,500 of direct materials in production.

Incurred $224,000 of direct labor wages.

Applied factory overhead at a rate of 75% of direct labor cost.

Transferred $626,400 of work in process to finished goods.

Sold goods with a cost of $605,800.

Sold goods for $1,084,400.

Incurred $260,500 of selling expenses.

Incurred $96,900 of administrative expenses.

a. Prepare the June income statement for Salsa. Assume that Salsa uses the perpetual inventory method.

Salsa Inc.
Income Statement
For the Month Ended June 30, 2016
		$
		$
	$
		$

b. Determine the inventory balances at the end of the first month of operations.

Materials inventory, June 30	$
Work in process inventory, June 30	$
Finished goods inventory, June 30	$