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 $$656,700$ of materials.

Used $$564,800$ of direct materials in production.

Incurred $$484,000$ of direct labor wages.

Applied factory overhead at a rate of $70\%$ of direct labor cost.

Transferred $$1,332,100$ of work in process to finished goods.

Sold goods with a cost of $$1,293,700.$

Revenues earned by selling bikes, $$2,315,700.$

Incurred $$556,300$ of selling expenses.

Incurred $$207,000$ of administrative expenses.

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

Rockhaven Biking Inc.

Income Statement

For the Month Ended February $28$

Line Item Description

Amount

Amount

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 $28$