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:

1. Purchased $224,000 of materials.
2. Used $161,280 of direct materials in production.
3. Incurred $403,200 of direct labor wages.
4. Incurred $161,300 of factory overhead.
5. Transferred $681,000 of work in process to finished goods.
6. Sold goods for $1,075,200.
7. Sold goods with a cost of $604,800.
8. Incurred $192,600 of selling expense.
9. Incurred $112,000 of administrative expense.

Using the information given, complete the following:

Prepare the January income statement for Sorensen Manufacturing Company. Round your answers to the nearest dollar.

Sorensen Manufacturing Company
Income Statement
For the Month Ended January 31
Revenues		1,075,200
Cost of goods sold		604,800
Gross profit		$fill in the blank 5
Operating expenses:
Selling expenses	$fill in the blank 9
Administrative expenses	fill in the blank 11
Total operating expenses		fill in the blank 12
Net income		$fill in the blank 14

Determine the inventory balances at the end of the first month of operations. Round your answers to the nearest dollar.

Sorensen Manufacturing Company
Inventory Balances
For the Month Ended January 31
Inventory balances on January 31:
Materials	$fill in the blank 16
Work in process	$fill in the blank 17
Finished goods	$fill in the blank 18

Feedback

1. Use "f, g, h, and i" in preparing the income statement.
2. Show the transactions in T accounts for materials, work in process, and finished goods.