UUVAUVO Learning eBook Calculator The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes: Purchased $415,300 of materials. Used $357,200 of direct materials in production Incurred $308,000 of direct labor wages. Applied factory overhead at a rate of 70% of direct labor cost. Transferred $845,600 of work in process to finished goods. Sold goods with a cost of $822,300, Revenues earned by selling bikes, $1,471,900. Incurred $353,600 of seling expenses. Incurred $131,600 of administrative expenses. a. Prepare the income statement for Rushmore Biking Inc. for the month ending February 28, Assume that Rushmore Biking Inc. uses the perpetual inventory method. Rushmore Biking Inc. Income Statement For the Month Ended February 28 Cost of goods sold X Operating income x Operating income x Selling and administrative expenses: Check My Work Previous Next eBook Calculator Operating income X Selling and administrative expenses: Cost of goods sold X Direct labor X Total selling and administrative expenses Operating loss x Feedback Check My Work a. Both product and period costs must be reported on the income statement and are necessary to measure income. b. Determine the inventory balances on February 28, the end of the first month of operations. Materials inventory, February 28 $ Work in process inventory, February 28 $ Finished goods inventory, February 28 Feedback Check My Work h Set in T arcounts for Materials Inventory Work in Process Inventory and Finished Goods Inventory accounts