Mgr Accounting Concepts:

2 parts (a & b):

The following events took place for Sorensen Manufacturing Company during January, the first month of its operation as a product of digital video monitors:

• Purchased $51,300 of materials
• Used $39,500 of direct materials in production
• Incurred $59,000 of direct labor wages
• Incurred $83,100 of factory overhead
• Transferred $138,000 of work in progress to finished goods
• Sold goods for $246,800
• Sold goods with a cost of $109,800
• Incurred $63,100 of selling expenses
• Incurred $27,700 of administrative expense

A) Prepare the January Income Statement

B) Determine the inventory balances at the end of the first month of operations

a. Prepare the January income statement for Sorensen Manufacturing Company. Sorensen Manufacturing Company Income Statement For the Month Ended January 31 Revenues $ Cost of goods sold Gross profit Operating expenses: Selling expenses Administrative expenses Total operating expenses Net income b. Determine the inventory balances at the end of the first month of operations. Sorensen Manufacturing Company Inventory Balances For the Month Ended January 31 Inventory balances on January 31: Materials Work in process Finished goods