The following events took place for Migliozzi Inc. during July, the first month of operations as a producer of road bikes:

Purchased $404,710 of materialsUsed $344,090 of direct materials in productionIncurred $298,900 of direct labor wagesApplied factory overhead at a rate of 78% of direct labor costTransferred $814,310 of work in process to finished goodsSold goods with a cost of $781,480Sold goods for $1,396,720Incurred $319,130 of selling expensesIncurred $120,230 of administrative expensesRequired:

a.Prepare the July income statement for Migliozzi. Assume that Migliozzi uses the perpetual inventory method. Be sure to complete the statement heading. Refer to the list of Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive. Colons (:) will fill in where needed.b.Determine the inventory balances at the end of the first month of operations.

X

Income Statement

a. Prepare the July income statement for Migliozzi. Assume that Migliozzi uses the perpetual inventory method. Be sure to complete the statement heading. Refer to the list of Accounts, Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive. Colons (:) will fill in where needed.