a. Purchased $95,200 of materials.
b. Used $67,200 of direct materials in production.
c. Incurred $128,800 of direct labor wages.
d. Incurred $151,200 of factory overhead.
e. Transferred $303,800 of work in process to finished goods.
f. Sold goods with a cost of $280,000.
g. Earned revenues of $450,000.
h. Incurred $65,400 of selling expense.
i. Incurred $54,600 of administrative expense.
Using the above information, complete the following:
a. Prepare the January 2014 income statement for Chaterjee Manufacturing Company.
b. Determine the inventory balances at the end of the first month of operations.
Answer:
a.
CHATERJEE MANUFACTURING COMPANY
Income Statement
For the Month Ended January 31, 2014
Revenues $450,000
Cost of goods sold 280,000
Gross profit $170,000
Operating expenses:
Selling expenses $65,400
Administrative expenses 54,600
Total operating expenses 120,000
Net income $ 50,000
b. Inventory balances on January 31, 2014:
Materials ($95,200 – $67,200)……………………………………………………… $28,000
Work in Process ($67,200 + $128,800 + $151,200 – $303,800)………………… $43,400
Finished Goods ($303,800 – $280,000)…………………………………………… $23,800