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

• Purchased $300,000 of materials.
• Used $271,600 of direct materials in production.
• Incurred $78,100 of direct labor wages.
• Applied factory overhead at a rate of 46% of direct labor cost.
• Transferred $365,700 of work in process to finished goods.
• Sold goods with a cost of $348,000.
• Revenues earned by selling bikes, $575,800.
• Incurred $117,100 of selling expenses.
• Incurred $56,900 of administrative expenses.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

1. Prepare the income statement for Rushmore Biking for the month ending February 28. Round your answers to the nearest dollar.

   Rushmore Biking Inc.
   Income Statement
   For the Month Ended February 28
   Revenues				$
   Cost of Goods Sold
   Gross Profit				$
   Selling and Administrative Expenses:
   Selling Expenses		$
   Administrative Expenses
   Total Selling and Administrative Expenses
   Operating Income				$

2. Determine the inventory balances on February 28, the end of the first month of operations. Round your answers to the nearest dollar.

   Materials inventory, February 28	$
   Work in process inventory, February 28	$
   Finished goods inventory, February 28	$