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 $485,600 of materials. Used $417,600 of direct materials in production. Incurred $360,000 of direct labor wages. Applied factory overhead at a rate of 80% of direct labor cost. Transferred $1,023,000 of work in process to finished goods. Sold goods with a cost of $961,500. Revenues earned by selling bikes, $1,721,100. Incurred $413,400 of selling expenses. Incurred $153,800 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 Selling and administrative expenses: Total selling and administrative expenses b. Determine the inventory balances on February 28, the end of the first month of operations. Materials inventory, February 28 Work in process inventory, February 28 Finished goods inventory, February 28 Job Order Cost Accounting for a Service Company The law firm of Furlan and Benson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during July: July 3. Charged 510 hours of professional lawyer) time to the Obsidian Co. breech of contract suit to prepare for the trial, at a rate of $240 per hour. 10. Reimbursed travel costs to employees for depositions related to the Obsidian case, $18,300. 14. Charged 130 hours of professional time for the Obsidian trial at a rate of $270 per hour. 18. Received invoice from consultants Wadsley and Harden for $47,500 for expert testimony related to the Obsidian trial. 27. Applied office overhead at a rate of $45 per professional hour charged to the Obsidian case. 31. Paid administrative and support salaries of $20,400 for the month. 31. Used office supplies for the month, $6,900. 31. Paid professional salaries of $193,000 for the month. 31. Billed Obsidian $288,200 for successful defense of the case. a. Provide the journal entries for each of these transactions. If an amount box does not require an entry, leave it blank. July 3 July 10 II II II II II II II II July 14 July 18 July 27 July 31 Admin. sal. II II II II II II II July 31 Supplies July 31 Prof. sal. July 31 Billed July 31 Cost b. How much office overhead is over- or underapplied? Enter your answer as a positive number. $ c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services. $ Entry for Jobs Completed; Cost of Unfinished Jobs The following account appears in the ledger prior to recognizing the jobs completed in January: Work in Process Balance, January 1 $14,770 Direct materials 120,080 Direct labor 129,530 Factory overhead 68,090 Jobs finished during January are summarized as follows: Job 210 $59,840 Job 224 $69,820 Job 216 36,570 Job 230 123,010 a. Journalize the entry to record the jobs completed. If an amount box does not require an entry, leave it blank. b. Determine the cost of the unfinished jobs at January 31