Sheridan Company is a manufacturer of computers. Its controller resigned in October 2022. An inexperienced assistant accountant has prepared the following income statement for the month of October 2022. SHERIDANCOMPANY Income Statement For the Month Ended October 31, 2022 Sales (net) $ 785,000 Less: Operating expenses Raw materials purchases $264,650 Direct labour cost 190,400 Advertising expense 89,550 Selling and administrative salaries 74,100 Rent on factory facilities 60,900 Depreciation on sales equipment 44,200 Depreciation on factory equipment 31,150 Indirect labour cost 28,950 Utilities expense 12,300 Insurance expense 8,300 804,500 Net Loss $(19,500)Prior to October 2022, the company had been profitable every month. The company's president is concerned about the accuracy of the income statement. As his friend, he has asked you to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired the following additional information. 1. Inventory balances at the beginning and end of October were as follows: October 1 October 31 Raw materials $16,750 $29,600 Work in process 16,250 15,000 Finished goods 30,700 45,800 2. Only 77% of the utilities expense and 51% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities