Instructions The following events took place for Chi-Lite Inc. during June 2016,
ID: 2337810 • Letter: I
Question
Instructions The following events took place for Chi-Lite Inc. during June 2016, the first month of operations as a producer of road bikes: . Purchased $396,000 of materials. Used $341,540 of direct materials in production. Incurred $296,900 of direct labor wages. Applied factory overhead at a rate of 70% of direct labor cost Transferred $817,280 of work in process to finished goods. Sold goods with a cost of $798,500. Sold goods for $1,392,000. Incurred $312,020 of selling expenses. Incurred $121,530 of administrative expenses. Required: A. Prepare the June income statement for Chi-Lite. Assume that Chi-Lite uses the perpetual inventory method. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. B. Determine the inventory balances at the end of the first month of operations.Explanation / Answer
Income statement :
b) Determine inventory balance :
Chi-Lite Inc. Income statement For the month ended june 30,2016 Sales 1392000 Less: Cost of goods sold 798500 Gross profit 593500 Less: Selling and administrative expense Selling expense 312020 Administrative expense 121530 Total Selling and administrative expense 433550 Income from operations 159950