1 answer

Financial statements of a manufacturing firm The following events took place for Rushmore Biking Inc. during...

Question:

Financial statements of a manufacturing firm The following events took place for Rushmore Biking Inc. during February, the fi
a. Prepare the income statement for Rushmore Biking for the month ending February 28. Round your answers to the nearest dolla
Financial statements of a manufacturing firm The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes: • Purchased $390,000 of materials. • Used $353,000 of direct materials in production. . Incurred $101,600 of direct labor wages. • Applied factory overhead at a rate of 41% of direct labor cost. • Transferred $470,600 of work in process to finished goods. . Sold goods with a cost of $447,800. • Revenues earned by selling bikes, $740,900. • Incurred $150,600 of selling expenses. • Incurred $73,300 of administrative expenses.
a. Prepare the income statement for Rushmore Biking for the month ending February 28. Round your answers to the nearest dollar. $ 730,300 441,400 Rushmore Biking Inc. Income Statement For the Month Ended February 28 Revenues Cost of Goods Sold Gross Profit Selling and Administrative Expenses: Selling Expenses Administrative Expenses Total Selling and Administrative Expenses 288,900 b. Determine the inventory balances on February 28, the end of the first month of operations. Round your answers to the nearest dollar. Materials inventory, February 28 $ Work in process inventory, February 28 $ Finished goods inventory, February 28 $

Answers

Solution

Rushmore Biking Inc.
Income Statement
For the Month Ended February 28
Revenues $     740,900
Cost of Goods Sold $     447,800
Gross Profit $     293,100
Selling and Administrative Expenses:
   Selling Expenses $     150,600
   Administrative Expenses $      73,300
Total Selling and Administrative Expenses $     223,900
Operating Income $      69,200

.

a. Materials inventory, February 28 $ 37,000
Work in process inventory, February 28 $ 25,656
Finished goods inventory, February 28 $ 22,800

Working

Working
a. Materials inventory, February 28 $ 37,000 (390000-353000)
Work in process inventory, February 28 $ 25,656
Finished goods inventory, February 28 $ 22,800 (470600-447800)

.

Direct material $ 353,000
Direct labor $ 101,600
Overhead applied $ 41,656
Total manufacturing cost $ 496,256
Less: Cost of goods manufactured $ 470,600
Ending work in process inventory $ 25,656
.

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