Your best friend, Chris, is the owner of Salazar Company, a manufacturer of tablets. Recently, Salazar's controller had to step down as she contracted Covid-19 and is now hospitalized. Jenny, the receptionist who attends MJC and is majoring in Accounting, prepared the income statement. Chris is concerned about the accuracy of the statement as the reported numbers are not consistent with prior periods'. Chris asks you to make the necessary corrections. Chris provides you with the income statement, the inventory levels at the beginning and end of the month, and allocation rates for the utilities expense and the insurance expense. Salazar Company Income Statement For the Month Ended August 31, 202X $ 675,000 $ Sales Revenue Operating Expenses Raw materials purchases Direct labor costs Advertising expense Selling and administrative salaries Rent on factory facilities Depreciation on sales equipment Depreciation on factory equipment Indirect labor cost Utilities expense Insurance expense Total operating expenses Net Loss 220,000 160,000 75,000 70,000 60,000 50,000 35,000 20,000 10,000 5,000 705,000 (30,000) $ Raw materials Work in process Finished goods August 1 August 31 $ 19,500 $ 35,000 $ 25,000 $ 21,000 $ 40,000 $ 52,000 Utilities Expense Insurance Expense Factory 60% 70% Other 40.00% 30.00% Requirements: 1. Prepare a cost of goods manufactured for August 202X. 2. Prepare a correct income statement for August 202X. 3. Write a memo explaining the managerial accounting principles Jenny violated. In your memo, quantify the magnitude of the error. Describe what impact Jenny's errors had on the accounting equation