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 $450,000 of materials. Used $423,200 of direct materials in production. Incurred $127,000 of direct labor wages. Applied factory overhead at a rate of 30% of direct labor cost. Transferred $565,000 of work in process to finished goods. Sold goods with a cost of $520,000. Revenues earned by selling bikes, $935,000. Incurred $180,000 of selling expenses. Incurred $95,000 of administrative expenses.

Question Content Area

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

Line Item Description	Amount	Amount
Cost of goods soldGross profitOperating incomeFactory overheadRevenues		$- Select -
Cost of goods soldOperating incomeMaterialsRevenuesSelling expenses		- Select -
Administrative expensesCost of goods soldGross profitOperating incomeRevenues		$- Select -
Selling and administrative expenses:	blank	blank
Cost of goods soldFactory overheadFinished goodsMaterialsSelling expenses	$- Select -
Administrative expensesCost of goods soldMaterialsRevenuesWork in process	- Select -	blank
Total selling and administrative expenses	blank	Total selling and administrative expenses
Administrative expensesCost of goods soldOperating 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 1 of 3$
Work in process inventory, February 28	fill in the blank 2 of 3$
Finished goods inventory, February 28	fill in the blank 3 of 3$