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 $308,300 of materials.
	Used $265,100 of direct materials in production.
	Incurred $228,000 of direct labor wages.
	Applied factory overhead at a rate of 75% of direct labor cost.
	Transferred $637,500 of work in process to finished goods.
	Sold goods with a cost of $607,400.
	Revenues earned by selling bikes, $1,087,200.
	Incurred $261,200 of selling expenses.
	Incurred $97,200 of administrative expenses.

Question Content Area

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

Cost of goods soldFinished goodsGross profitOperating incomeFactory overheadRevenues		$- Select -
Cost of goods manufacturedCost of goods soldOperating incomeMaterialsRevenuesSelling expenses		- Select -
Administrative expensesCost of goods soldGross profitOperating incomeRevenuesWork in process		$- Select -
Selling and administrative expenses:	blank	blank
Cost of goods soldFactory overheadFinished goodsMaterialsSelling expensesWork in process	$- Select -
Administrative expensesCost of goods soldDirect laborMaterialsRevenuesWork in process	- Select -	blank
Total selling and administrative expenses	blank	fill in the blank adcd670d6f8ef88_11
Administrative expensesCost of goods soldFinished goodsOperating incomeOperating lossWork in process		$- Select -

Question Content Area

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

Materials inventory, February 28	$fill in the blank db861f030001068_1
Work in process inventory, February 28	$fill in the blank db861f030001068_2
Finished goods inventory, February 28	$fill in the blank db861f030001068_3