Question

The following events took place for Technology Treasures Manufacturing Company during January, the first month of its operations as a producer of digital video monitors: a. Purchased $138,600 of materials. b. Used $93,540 of direct materials in production. c. Incurred $182,560 of direct labor wages. d. Incurred $213,040 of factory overhead. e. Transferred $426,220 of work in process to finished goods. f. Sold goods for $660,000. g. Sold goods with a cost of $367,500. h. Incurred $86,200 of selling expense. i. Incurred $70,250 of administrative expense. Required: Using the information given, complete the following: a. Prepare the January income statement for Technology Treasures Manufacturing Company. Be sure to complete the statement heading. Refer to the lists of Accounts, Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Colons (:) will fill in where needed. Enter amounts as positive numbers unless the amount is a calculation that results in a negative amount. For example: Net loss should be negative. Expenses should be positive. b. Determine the Materials Inventory, Work in Process Inventory, and Finished Goods Inventory balances at the end of the first month of operations.

Answer 1

Technology Treasures Manufacturing Company

a) Technology Treasures Manufacturing Company

Income Statement for the month ended January 31

Sales revenue $660,000

Cost of goods sold 367,500

Gross profit $292,500

Expenses:

Selling expense $86,200

Admin. expense 70,250 156,450

Net income $136,050

b) Ending balances of:

Materials Inventory, $45,060

Work in Process Inventory, $62,920

Finished Goods Inventory, $58,720

Step-by-step explanation:

a) Data and Analysis:

a. Raw materials $138,600 Cash $138,600

b. Work in process$93,540 Raw materials $93,540

c. Work in process $182,560 Payroll expenses $182,560

d. Work in process $213,040 Factory overhead $213,040

e. Finished goods $426,220 Work in process $426,220

f. Cash $660,000 Sales revenue $660,000

g. Cost of goods sold $367,500 Finished goods $367,500

h. Selling expense $86,200 Cash $86,200

i. Administrative expense $70,250 Cash $70,250

Materials Inventory

Account Titles Debit Credit

Cash $138,600

Work in process $93,540

Ending balance 45,060

Work in Process Inventory

Account Titles Debit Credit

Raw materials $93,540

Payroll expenses 182,560

Factory overhead 213,040

Finished goods $426,220

Ending balance 62,920

Finished Goods Inventory

Account Titles Debit Credit

Work in process $426,220

Cost of goods sold $367,500

Ending balance 58,720