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

• Purchased $416,000 of materials
• Used $358,000 of direct materials in production
• Incurred $308,000 of direct labor wages
• Applied factory overhead at a rate of 75% of direct labor cost
• Transferred $851,000 of work in process to finished goods
• Sold goods with a cost of $806,000
• Sold goods for $1,460,000
• Incurred $328,000 of selling expenses
• Incurred $131,000 of administrative expenses

Required:

1. 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.
2. Determine the inventory balances at the end of the first month of operations.