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 $56,900 of materials.
2. Used $43,800 of direct materials in production.
3. Incurred $65,400 of direct labor wages.
4. Incurred $92,200 of factory overhead.
5. Transferred $153,100 of work in process to finished goods.
6. Sold goods for $273,700.
7. Sold goods with a cost of $121,800.
8. Incurred $70,000 of selling expense.
9. Incurred $30,700 of administrative expense.

Using the information given, complete the following:

Question Content Area

a. Prepare the January income statement for Sorensen Manufacturing Company.

Administrative expensesGross profitRevenuesSelling expensesRevenues		$Revenues
Administrative expensesCost of goods soldFinished goodsWork in processCost of goods sold		Cost of goods sold
Administrative expensesGross profitNet incomeSelling expensesGross profit		$Gross profit
Operating expenses:
Cost of goods soldMaterialsRevenuesSelling expensesSelling expenses	$Selling expenses
Administrative expensesCost of goods soldGross profitWork in processAdministrative expenses	Administrative expenses
Total operating expenses		fill in the blank 7fc49cf81f9df87_11
Net incomeNet lossNet income		$Net income

Question Content Area

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

Inventory balances on January 31:
Materials	$fill in the blank 87d5c301ffce023_1
Work in process	fill in the blank 87d5c301ffce023_2
Finished goods	fill in the blank 87d5c301ffce023_3

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