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The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes: • Purchased $294,000 of materials. • Used $252,800 of direct materials in production. • Incurred $216,000 of direct labor wages. • Applied factory overhead at a rate of 80% of direct labor cost. • Transferred $615,900 of work in process to finished goods. • Sold goods with a cost of $588,000. • Revenues earned by selling bikes, $1,052,500. • Incurred $252,800 of selling expenses. • Incurred $94,100 of administrative expenses. Question Content Area a.  Prepare the income statement for Rushmore Biking Inc. for the month ending February 28. Assume that Rushmore Biking Inc. uses the perpetual inventory method. Rushmore Biking Inc.Income StatementFor the Month Ended February 28     $- Select -     - Select -

The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes: • Purchased $294,000 of materials. • Used $252,800 of direct materials in production. • Incurred $216,000 of direct labor wages. • Applied factory overhead at a rate of 80% of direct labor cost. • Transferred $615,900 of work in process to finished goods. • Sold goods with a cost of $588,000. • Revenues earned by selling bikes, $1,052,500. • Incurred $252,800 of selling expenses. • Incurred $94,100 of administrative expenses. Question Content Area a.  Prepare the income statement for Rushmore Biking Inc. for the month ending February 28. Assume that Rushmore Biking Inc. uses the perpetual inventory method. Rushmore Biking Inc.Income StatementFor the Month Ended February 28     $- Select -     - Select -

Century 21 Accounting Multicolumn Journal
Century 21 Accounting Multicolumn Journal
11th Edition
ISBN:9781337679503
Author:Gilbertson
Publisher:Gilbertson
Chapter20: Accounting For Inventory
Section: Chapter Questions
Problem 3AP
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The following events took place for Rushmore Biking Inc. during February, the first month of operations as a producer of road bikes:

• Purchased $294,000 of materials.
• Used $252,800 of direct materials in production.
• Incurred $216,000 of direct labor wages.
• Applied factory overhead at a rate of 80% of direct labor cost.
• Transferred $615,900 of work in process to finished goods.
• Sold goods with a cost of $588,000.
• Revenues earned by selling bikes, $1,052,500.
• Incurred $252,800 of selling expenses.
• Incurred $94,100 of administrative expenses.

Question Content Area

a.  Prepare the income statement for Rushmore Biking Inc. for the month ending February 28. Assume that Rushmore Biking Inc. uses the perpetual inventory method.

Rushmore Biking Inc.Income StatementFor the Month Ended February 28
 
   $- Select -
 
   - Select -
 
   $- Select -
Selling and administrative expenses: blank blank
 
 $- Select -  
 
 - Select - blank
Total selling and administrative expenses blank fill in the blank 3e8e17f74037051_11
 
   $- Select -
 

 

b.  Determine the inventory balances on February 28, the end of the first month of operations.

Materials inventory, February 28 $fill in the blank fb2e2eff4fd6fe7_1
Work in process inventory, February 28 $fill in the blank fb2e2eff4fd6fe7_2
Finished goods inventory, February 28 $fill in the blank fb2e2eff4fd6fe7_3
• Revenues earned by selling bikes, $1,052,500. • Incurred $252,800 of selling expenses. • Incurred $94,100 of administrative expenses. a. Prepare the income statement for Rushmore Biking Inc. for the month ending February 28. Assume that Rushmore Biking Inc. uses the perpetual inventory method. Rushmore Biking Inc. Income Statement For the Month Ended February 28 Selling and administrative expenses: Total selling and administrative expenses b. Determine the inventory balances on February 28, the end of the first month of operations. Materials inventory, February 28 Work in process inventory, February 28 Finished goods inventory, February 28 $ $ $
Transcribed Image Text:• Revenues earned by selling bikes, $1,052,500. • Incurred $252,800 of selling expenses. • Incurred $94,100 of administrative expenses. a. Prepare the income statement for Rushmore Biking Inc. for the month ending February 28. Assume that Rushmore Biking Inc. uses the perpetual inventory method. Rushmore Biking Inc. Income Statement For the Month Ended February 28 Selling and administrative expenses: Total selling and administrative expenses b. Determine the inventory balances on February 28, the end of the first month of operations. Materials inventory, February 28 Work in process inventory, February 28 Finished goods inventory, February 28 $ $ $
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