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
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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![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
+A](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd2ed5e6c-0d63-4e2f-81c7-ef354af209b5%2Fbed37089-330d-44f4-b233-ea3a561f31cd%2Febvypw_processed.png&w=3840&q=75)
Transcribed Image Text: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
+A
![Financial Statements of a Manufacturing Firm
The following events took place for Rockhaven Biking Inc. during February, the first month of operations as a producer of road bikes:
• Purchased $224,600 of materials.
• Used $193,200 of direct materials in production.
• Incurred $168,000 of direct labor wages.
• Applied factory overhead at a rate of 70% of direct labor cost.
• Transferred $459,600 of work in process to finished goods.
• Sold goods with a cost of $447,000.
• Revenues earned by selling bikes, $800,100.
• Incurred $192,200 of selling expenses.
• Incurred $71,500 of administrative expenses.
a. Prepare the income statement for Rockhaven Biking Inc. for the month ending February 28.
Rockhaven Biking Inc.
Income Statement
For the Month Ended February 28
Amount
Line Item Description
Revenues
Cost of goods sold
Gross profit
Selling and administrative expenses:
Selling expenses
Administrative expenses
Total selling and administrative expenses
Operating income
192,200
71,500
Amount
800,100
447,000
353,100
263,700
89,400](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd2ed5e6c-0d63-4e2f-81c7-ef354af209b5%2Fbed37089-330d-44f4-b233-ea3a561f31cd%2Fgifadra_processed.png&w=3840&q=75)
Transcribed Image Text:Financial Statements of a Manufacturing Firm
The following events took place for Rockhaven Biking Inc. during February, the first month of operations as a producer of road bikes:
• Purchased $224,600 of materials.
• Used $193,200 of direct materials in production.
• Incurred $168,000 of direct labor wages.
• Applied factory overhead at a rate of 70% of direct labor cost.
• Transferred $459,600 of work in process to finished goods.
• Sold goods with a cost of $447,000.
• Revenues earned by selling bikes, $800,100.
• Incurred $192,200 of selling expenses.
• Incurred $71,500 of administrative expenses.
a. Prepare the income statement for Rockhaven Biking Inc. for the month ending February 28.
Rockhaven Biking Inc.
Income Statement
For the Month Ended February 28
Amount
Line Item Description
Revenues
Cost of goods sold
Gross profit
Selling and administrative expenses:
Selling expenses
Administrative expenses
Total selling and administrative expenses
Operating income
192,200
71,500
Amount
800,100
447,000
353,100
263,700
89,400
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