The following events took place for Rockhaven Biking Inc. during February, the first month of operations as a producer of road bikes Purchased $401,300 of materials. • Used $345,100 of direct materials in production. Incurred $296,000 of direct labor wages. • Applied factory overhead at a rate of 70% of direct labor cost. • Transferred $814,400 of work in process to finished goods. Sold goods with a cost of $798,600. • Revenues earned by selling bikes, $1,429,500. • Incurred $343,400 of selling expenses. Incurred $127,800 of administrative expenses.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Financial Statements of a Manufacturing Firm
The following events took place for Rockhaven Biking Inc. during February, the first month of operations as a producer of road bikes:
• Purchased $401,300 of materials.
• Used $345,100 of direct materials in production.
• Incurred $296,000 of direct labor wages.
• Applied factory overhead at a rate of 70% of direct labor cost.
• Transferred $814,400 of work in process to finished goods.
• Sold goods with a cost of $798,600.
• Revenues earned by selling bikes, $1,429,500.
• Incurred $343,400 of selling expenses.
◆ Incurred $127,800 of administrative expenses.
a. Prepare the income statement for Rockhaven Biking Inc. for the month ending February 28.
Rockhaven Biking Inc.
Income Statement
For the Month Ended February 28
Amount
Line Item Description
Selling and administrative expenses:
Total selling and administrative expenses
Amount
S
Transcribed Image Text:K Financial Statements of a Manufacturing Firm The following events took place for Rockhaven Biking Inc. during February, the first month of operations as a producer of road bikes: • Purchased $401,300 of materials. • Used $345,100 of direct materials in production. • Incurred $296,000 of direct labor wages. • Applied factory overhead at a rate of 70% of direct labor cost. • Transferred $814,400 of work in process to finished goods. • Sold goods with a cost of $798,600. • Revenues earned by selling bikes, $1,429,500. • Incurred $343,400 of selling expenses. ◆ Incurred $127,800 of administrative expenses. a. Prepare the income statement for Rockhaven Biking Inc. for the month ending February 28. Rockhaven Biking Inc. Income Statement For the Month Ended February 28 Amount Line Item Description Selling and administrative expenses: Total selling and administrative expenses Amount S
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