Question

The following events took place for Chi-Lite Inc. during June, the first month of operations as...

The following events took place for Chi-Lite Inc. during June, the first month of operations as a producer of road bikes:

Purchased $396,730 of materials.
Used $343,310 of direct materials in production.
Incurred $294,600 of direct labor wages.
Applied factory overhead at a rate of 74% of direct labor cost.
Transferred $816,250 of work in process to finished goods.
Sold goods with a cost of $797,470.
Sold goods for $1,409,300.
Incurred $318,060 of selling expenses.
Incurred $120,840 of administrative expenses.
Required:
a. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Colons (:) will fill in where needed.
b. Determine the inventory balances at the end of the first month of operations.

Labels and Amount Descriptions

Labels
For the Month Ended June 30
June 30
Selling and administrative expenses
Amount Descriptions
Administrative expenses
Cost of goods sold
Factory overhead
Gross profit
Income from operations
Materials
Revenues
Selling expenses
Total selling and administrative expenses

Income Statement

a. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. Colons (:) will fill in where needed.

Chi-Lite Inc.

Income Statement

1

2

3

4

5

6

7

8

Inventory Balances

b. Determine the inventory balances at the end of the first month of operations.

Materials inventory, June 30
Work in process inventory, June 30
Finished goods inventory, June 30

Homework Answers

Answer #1

Solution a:

Chi-Lite Inc.
Income Statement
For the month ended June 30
Event Particulars Amount
1 Revenues $1,409,300.00
2 Cost of goods sold $797,470.00
3 Gross Profit $611,830.00
4 Selling and administrative expenses:
5 Selling Expenses $318,060.00
6 Administrative expenses $120,840.00
7 Total Selling and Administrative Expenses $438,900.00
8 Income from operations $172,930.00

Solution b:

Inventory Balances
30-Jun
Particulars Amount Descriptions
Materials inventory, June 30 ($396,730 - $343,310) $53,420.00
Work In Process inventory, June 30 ($343,310 + $294,600 + $294,600*74% - $816,250) $39,664.00
Finished Goods inventory, June 30 ($816,250 - $797,470) $18,780.00
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Financial Statements of a Manufacturing Firm The following events took place for Chi-Lite Inc. during June,...
Financial Statements of a Manufacturing Firm The following events took place for Chi-Lite Inc. during June, the first month of operations as a producer of road bikes: • Purchased $210,000 of materials. • Used $180,600 of direct materials in production. • Incurred $156,000 of direct labor wages. • Applied factory overhead at a rate of 70% of direct labor cost. • Transferred $428,000 of work in process to finished goods. • Sold goods with a cost of $417,900. • Sold...
The following events took place for Digital Vibe Manufacturing Company during March, the first month of...
The following events took place for Digital Vibe Manufacturing Company during March, the first month of its operations as a producer of digital video monitors: a. Purchased $133,800 of materials. b. Used $94,100 of direct materials in production. c. Incurred $184,480 of direct labor wages. d. Incurred $215,200 of factory overhead. e. Transferred $425,880 of work in process to finished goods. f. Sold goods for $664,000. g. Sold goods with a cost of $360,000. h. Incurred $85,460 of selling expense....
The following events took place for Digital Vibe Manufacturing Company during March, the first month of...
The following events took place for Digital Vibe Manufacturing Company during March, the first month of its operations as a producer of digital video monitors: a. Purchased $137,200 of materials. b. Used $94,320 of direct materials in production. c. Incurred $180,640 of direct labor wages. d. Incurred $212,320 of factory overhead. e. Transferred $427,800 of work in process to finished goods. f. Sold goods for $655,000. g. Sold goods with a cost of $360,250. h. Incurred $86,160 of selling expense....
The following events took place for Fed Inc. during October 2012, the first month of operations...
The following events took place for Fed Inc. during October 2012, the first month of operations as a producer of road bikes: Purchased $427,000 of materials. Used $367,500 of direct materials in production. Incurred $315,000 of direct labor wages. Applied factory overhead at a rate of 80% of direct labor cost. Transferred $892,500 of work in process to finished goods. Sold goods with a cost of $848,750. Sold goods for $1,500,000. Incurred $367,500 of selling expenses. Incurred $131,950 of administrative...
The following events took place for Digital Vibe Manufacturing Company during March, the first month of...
The following events took place for Digital Vibe Manufacturing Company during March, the first month of its operations as a producer of digital video monitors: a. Purchased $137,800 of materials. b. Used $94,100 of direct materials in production. c. Incurred $184,800 of direct labor wages. d. Incurred $212,720 of factory overhead. e. Transferred $423,160 of work in process to finished goods. f. Sold goods for $645,000. g. Sold goods with a cost of $365,000. h. Incurred $86,260 of selling expense....
The following events took place for Digital Vibe Manufacturing Company during March, the first month of...
The following events took place for Digital Vibe Manufacturing Company during March, the first month of its operations as a producer of digital video monitors: a. Purchased $138,800 of materials. b. Used $94,780 of direct materials in production. c. Incurred $181,280 of direct labor wages. d. Incurred $213,200 of factory overhead. e. Transferred $428,060 of work in process to finished goods. f. Sold goods for $654,000. g. Sold goods with a cost of $360,750. h. Incurred $85,320 of selling expense....
The following events took place for Digital Vibe Manufacturing Company during March, the first month of...
The following events took place for Digital Vibe Manufacturing Company during March, the first month of its operations as a producer of digital video monitors: a. Purchased $133,800 of materials. b. Used $94,100 of direct materials in production. c. Incurred $184,480 of direct labor wages. d. Incurred $215,200 of factory overhead. e. Transferred $425,880 of work in process to finished goods. f. Sold goods for $664,000. g. Sold goods with a cost of $360,000. h. Incurred $85,460 of selling expense....
Financial Statements of a Manufacturing Firm The following events took place for Focault Inc. during July...
Financial Statements of a Manufacturing Firm The following events took place for Focault Inc. during July 20Y2, the first month of operations as a producer of road bikes: Purchased $497,800 of materials Used $428,100 of direct materials in production Incurred $368,000 of direct labor wages Applied factory overhead at a rate of 75% of direct labor cost Transferred $1,029,200 of work in process to finished goods Sold goods with a cost of $980,700 Sold goods for $1,755,500 Incurred $421,700 of...
Financial Statements of a Manufacturing Firm The following events took place for Rushmore Biking Inc. during...
Financial Statements of a Manufacturing Firm The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes: • Purchased $432,900 of materials. • Used $372,300 of direct materials in production. • Incurred $320,000 of direct labor wages. • Applied factory overhead at a rate of 80% of direct labor cost. • Transferred $910,400 of work in process to finished goods. • Sold goods with a cost of $865,800. •...
Financial Statements of a Manufacturing Firm The following events took place for Rushmore Biking Inc. during...
Financial Statements of a Manufacturing Firm The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes: • Purchased $480,000 of materials. • Used $434,500 of direct materials in production. • Incurred $125,000 of direct labor wages. • Applied factory overhead at a rate of 40% of direct labor cost. • Transferred $578,000 of work in process to finished goods. • Sold goods with a cost of $550,000. •...