Chapter 1, Problem 10E

a.

To determine

Income statement:

The income statement is a financial statement that shows the net income earned or net loss suffered by a company through reporting all the revenues earned, and expenses incurred by the company over a specific period of time. An income statement is also known as an operation statement, an earning statement, a revenue statement, or a profit and loss statement. The net income is the excess of revenue over expenses.

Material Inventory:

Material inventory comprises of the direct material costs, and indirect material costs that have not entered into the process of manufacturing.

Work in process Inventory:

Work in process inventory comprises of the direct material costs, direct labor costs, and factory overhead costs that have entered into the process of manufacturing, but are not yet completed.

Finished goods Inventory:

Finished goods inventory comprises of the finished products that are completed manufacturing, but have not been sold.

To prepare: The March income statement for the Company DVM.

b.

To determine

The materials inventory, work in process inventory, and finished goods inventory balances at the end of the first month of operations.