Question

1. Financial statements of a manufacturing firm

   The following events took place for Sorensen Manufacturing Company during January, the first month of its operations as a producer of digital video monitors:

   1. Purchased $279,000 of materials.
   2. Used $200,880 of direct materials in production.
   3. Incurred $502,200 of direct labor wages.
   4. Incurred $200,900 of factory overhead.
   5. Transferred $848,200 of work in process to finished goods.
   6. Sold goods for $1,339,200.
   7. Sold goods with a cost of $753,300.
   8. Incurred $239,900 of selling expense.
   9. Incurred $139,500 of administrative expense.
   10. Using the information given, complete the following:

       1. Prepare the January income statement for Sorensen Manufacturing Company. Round your answers to the nearest dollar.

          Sorensen Manufacturing Company
          Income Statement
          For the Month Ended January 31
          		$
          		$
          Operating expenses:
          	$
          Total operating expenses
          		$

       2. 
          

       3. Determine the inventory balances at the end of the first month of operations. Round your answers to the nearest dollar.

          Sorensen Manufacturing Company
          Inventory Balances
          For the Month Ended January 31
          Inventory balances on January 31:
          Materials	$
          Work in process	$
          Finished goods	$

Answer 1

1. Prepare the January income statement for Sorensen Manufacturing Company. Round your answers to the nearest dollar.

   Sorensen Manufacturing Company
   Income Statement
   For the Month Ended January 31
   Sales		$1339200
   Cost of goods sold		753300
   Gross profit		$585900
   Operating expenses:
   Selling expense	$239900
   Administrative expense	139500
   Total operating expenses		379400
   Operating income		$206500

2. Determine the inventory balances at the end of the first month of operations. Round your answers to the nearest dollar.

   Sorensen Manufacturing Company
   Inventory Balances
   For the Month Ended January 31
   Inventory balances on January 31:
   Materials (279000-200880)	$78120
   Work in process (200880+502200+200900-848200)	$55780
   Finished goods (848200-753300)	$94900