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

   • Purchased $390,000 of materials.
   • Used $353,000 of direct materials in production.
   • Incurred $101,600 of direct labor wages.
   • Applied factory overhead at a rate of 35% of direct labor cost.
   • Transferred $464,800 of work in process to finished goods.
   • Sold goods with a cost of $442,300.
   • Revenues earned by selling bikes, $731,800.
   • Incurred $148,800 of selling expenses.
   • Incurred $72,400 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				$fill in the blank 3
      Cost of Goods Sold				fill in the blank 5
      Gross Profit				$fill in the blank 7
      Selling and Administrative Expenses:
      Selling Expenses		$fill in the blank 9
      Administrative Expenses		fill in the blank 11
      Total Selling and Administrative Expenses				fill in the blank 12
      Operating Income				$fill in the blank 14

   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	$fill in the blank 15
      Work in process inventory, February 28	$fill in the blank 16
      Finished goods inventory, February 28	$fill in the blank 17