Labels and Amount Income Statement Inventory Balances Instructions The tollowing

ID: 2547437 • Letter: L

Question

Labels and Amount Income Statement Inventory Balances Instructions The tollowing events took place for Chi-Lite Inc. during June, the first month of operations as a producer of road bikes . Purchased $404,710 of materials. Used $344,090 of direct materials in production. Incurred $298,900 of direct labor wages Applied factory overhead at a rate of 78% of dred labor cost Transterred $814,310 of work in process to finished goods. Sold goods with a cost of $781,480. Sold goods for $1,396,720. Incurred $319,130 of seling expenses. Incurred $120,230 of administrative expenses Required: a Prepare the June income statement for Chi-Lite. Assume that Amount Descriptions provided for the exact wording of b. Determine the inventory balances at the end of the first month of operations Chi-Lite uses the perpetual inventory method. Refer to the list of Labeis and the answer choices for text entries. Colons (C) will tiar in where needed Check My Work All work saved 30

Explanation / Answer

Answer:

Chi-lite inc

Income statement

Sales

1396720

Cost of goods sold

781480

Gross margin

615240

Less: Selling & administrative exps

Selling expenses

319130

Administrative expenses

120230

439360

Net Income

175880

_______________________________________________

Materials

60620

Work in Process

61822

Finished goods

32830

Working for the answer

Material balance

=404710-344090

=$60,620

WIP Balance

=Beg. WIP+DM+DL+Applied OH-traffered to Finished Goods

=0+344090+298900+75%*298900-814310

=$61,822

Finished goods balance

=Begining+tranfer from WIP-COGS

= 0+814310-781480

=$32,830