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 $275,000 of materials.
2. Used $198,000 of direct materials in production.
3. Incurred $495,000 of direct labor wages.
4. Incurred $198,000 of factory overhead.
5. Transferred $836,000 of work in process to finished goods.
6. Sold goods for $1,320,000.
7. Sold goods with a cost of $742,500.
8. Incurred $236,500 of selling expense.
9. Incurred $137,500 of administrative expense.

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

Using the information given, complete the following:

1. Prepare the January income statement for Sorensen Manufacturing Company. Round your answers to the nearest dollar.

   Sorensen Manufacturing Company
   Income Statement
   For the Month Ended January 31
   Administrative expensesGross profitRevenuesSelling expenses		$fill in the blank 3
   Administrative expensesCost of goods soldFinished goodsWork in process		fill in the blank 5
   Administrative expensesGross profitNet incomeSelling expenses		$fill in the blank 7
   Operating expenses:
   Cost of goods soldMaterialsRevenuesSelling expenses	$fill in the blank 9
   Administrative expensesCost of goods soldGross profitWork in process	fill in the blank 11
   Total operating expenses		fill in the blank 12
   Net incomeNet loss		$fill in the blank 14

3. Determine the inventory balances at the end of the first month of operations. Round your answers to the nearest dollar.

   Sorensen Manufacturing Company
   Inventory Balances
   For the Month Ended January 31
   Inventory balances on January 31:
   Materials	$fill in the blank 15
   Work in process	$fill in the blank 16
   Finished goods	$fill in the blank 17