Financial Statements of a Manufacturing Firm

The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:

	Purchased $190,700 of materials.
	Used $164,000 of direct materials in production.
	Incurred $140,000 of direct labor wages.
	Applied factory overhead at a rate of 75% of direct labor cost.
	Transferred $392,600 of work in process to finished goods.
	Sold goods with a cost of $381,400.
	Revenues earned by selling bikes, $682,700.
	Incurred $164,000 of selling expenses.
	Incurred $61,000 of administrative expenses.

a. Prepare the income statement for Rushmore Biking Inc. for the month ending February 28. Assume that Rushmore Biking Inc. uses the perpetual inventory method.

Rushmore Biking Inc.
Income Statement
For the Month Ended February 28
		$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 on February 28, the end of the first month of operations.

Materials inventory, February 28	$fill in the blank
Work in process inventory, February 28	$fill in the blank
Finished goods inventory, February 28	$fill in the blank