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 $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 80% of direct labor cost. • Transferred $1,046,900 of work in process to finished goods. • Sold goods with a cost of $985,600. • Sold goods for $1,764,200. • Incurred $423,800 of selling expenses. • Incurred $157,700 of administrative expenses. a. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method. Chi-Lite Inc. Income Statement For the Month Ended June 30 Selling and Administrative Expenses: Total Selling and Administrative Expenses 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 $ $
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 $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 80% of direct labor cost. • Transferred $1,046,900 of work in process to finished goods. • Sold goods with a cost of $985,600. • Sold goods for $1,764,200. • Incurred $423,800 of selling expenses. • Incurred $157,700 of administrative expenses. a. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method. Chi-Lite Inc. Income Statement For the Month Ended June 30 Selling and Administrative Expenses: Total Selling and Administrative Expenses 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 $ $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
80.
Subject : - Accounting
Transcribed Image Text: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 $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 80% of direct labor cost.
• Transferred $1,046,900 of work in process to finished goods.
• Sold goods with a cost of $985,600.
• Sold goods for $1,764,200.
• Incurred $423,800 of selling expenses.
• Incurred $157,700 of administrative expenses.
●
a. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method.
Chi-Lite Inc.
Income Statement
For the Month Ended June 30
Selling and Administrative Expenses:
Total Selling and Administrative Expenses
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
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