Financial Statements of a Manufacturing Firm

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

Purchased $450,000 of materials. Used $407,300 of direct materials in production. Incurred $117,200 of direct labor wages. Applied factory overhead at a rate of 34% of direct labor cost. Transferred $535,200 of work in process to finished goods. Sold goods with a cost of $509,300. Revenues earned by selling bikes, $842,600. Incurred $171,300 of selling expenses. Incurred $83,300 of administrative expenses.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

a. Prepare the income statement for Rockhaven Biking Inc. for the month ending February 28.

Line Item Description	Amount	Amount
Factory OverheadFinished GoodsGross ProfitOperating IncomeRevenuesRevenues		$fill in the blank 3
Cost of Goods SoldFactory OverheadOperating IncomeSelling ExpensesRevenuesCost of Goods Sold		fill in the blank 5
Administrative ExpensesFactory OverheadGross ProfitOperating IncomeRevenuesGross Profit		$fill in the blank 7
Selling and Administrative Expenses:
Cost of Goods SoldFactory OverheadFinished GoodsRevenuesSelling ExpensesSelling Expenses	$fill in the blank 9
Administrative ExpensesDirect LaborMaterialsRevenuesWork in ProcessAdministrative Expenses	fill in the blank 11
Total Selling and Administrative Expenses		fill in the blank 12
Cost of Goods ManufacturedFinished GoodsMaterialsOperating IncomeWork in ProcessOperating Income		$fill in the blank 14

b. Determine the inventory balances on February 28, the end of the first month of operations.

Materials inventory, February 28	$fill in the blank 15
Work in process inventory, February 28	$fill in the blank 16
Finished goods inventory, February 28	$fill in the blank 17