Financial Statements of a Manufacturing Firm

The following events took place for LAE Manufacturing Company during January 2014, the first month of its operations as a producer of digital thermometers:

Purchased $56,700 of materials

Used $43,700 of direct materials in production.

Incurred $65,200 of direct labor wages.

Incurred $91,900 of factory overhead.

Transferred $152,500 of work in process to finished goods.

Sold goods with a cost of $121,300.

Earned revenues of $272,700.

Incurred $69,700 of selling expenses.

Incurred $30,600 of administrative expenses.

a. Prepare the January 2014 income statement for LAE Manufacturing Company.

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