Financial Statements of a Manufacturing Firm

The following events took place for Focault Inc. during July 20Y2, the first month of operations as a producer of road bikes:

• Purchased $296,300 of materials
• Used $254,800 of direct materials in production
• Incurred $220,000 of direct labor wages
• Applied factory overhead at a rate of 80% of direct labor cost
• Transferred $624,800 of work in process to finished goods
• Sold goods with a cost of $583,700
• Sold goods for $1,044,800
• Incurred $251,000 of selling expenses
• Incurred $93,400 of administrative expenses

a. Prepare the July income statement for Focault. Assume that Focault uses the perpetual inventory method.

Focault Inc.
Income Statement
For the Month Ended July 31, 20Y2
		$fill in the blank
		fill in the blank
		$fill in the blank
Selling and administrative expenses:
	$fill in the blank
	fill in the blank
Total selling and administrative expenses		fill in the blank
		$fill in the blank

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

Materials inventory, July 31	$fill in the blank
Work in process inventory, July 31	$fill in the blank
Finished goods inventory, July 31	$fill in the blank