Answered: Determine the inventory balances at the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

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:

Purchased $237,000 of materials.
Used $170,640 of direct materials in production.
Incurred $426,600 of direct labor wages.
Incurred $170,600 of factory overhead.
Transferred $720,500 of work in process to finished goods.
Sold goods for $1,137,600.
Sold goods with a cost of $639,900.
Incurred $203,800 of selling expense.
Incurred $118,500 of administrative expense.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Using the information given, complete the following:

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
		$fill in the blank 3
		fill in the blank 5
		$fill in the blank 7
Operating expenses:
	$fill in the blank 9
	fill in the blank 11
Total operating expenses		fill in the blank 12
		$fill in the blank 14

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	$fill in the blank 15
Work in process	$fill in the blank 16
Finished goods	$fill in the blank 17

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