The following events took place for Chi-Lite Inc. during June 2016, the first month of...
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Accounting
The following events took place for Chi-Lite Inc. during June 2016, the first month of operations as a producer of road bikes:
Purchased $400,000 of materials.
Used $343,750 of direct materials in production.
Incurred $295,000 of direct labor wages.
Applied factory overhead at a rate of 75% of direct labor cost.
Transferred $815,000 of work in process to finished goods.
Sold goods with a cost of $789,000.
Sold goods for $1,400,000.
Incurred $316,000 of selling expenses.
Incurred $125,000 of administrative expenses.
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.
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