Katherine’s Outdoor Furniture, a manufacturer specializing in lawn, deck, and poolside furniture, showed the following amounts in its inventory accounts on January 1:
Raw Materials Inventory. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . $226,800
Work-in-Process Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 427,900
Finished Goods Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182,700
Katherine’s Outdoor Furniture engaged in the following transactions during January:
(1) Acquired raw materials costing $667,200 on account.
(2) Issued, to producing departments, raw materials costing $689,100.
(3) Paid salaries and wages during January for services received during the month as follows:
Factory Workers . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . $432,800
Sales Personnel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,700
Administrative Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,300
(4) Calculated depreciation on buildings and equipment during January as follows:
Manufacturing Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $182,900
Selling Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87,400
Administrative Facilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,200
(5) Incurred and paid other operating costs in cash as follows:
Manufacturing . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $218,500
Selling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,100
Administrative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,700
(6) The cost of goods manufactured and transferred to the finished goods storeroom totaled $1,564,500.
(7) Sales on account during January totaled $2,400,000.
(8) A physical inventory taken on January 31 revealed a finished goods inventory of $210,600.
a. Present journal entries to record the transactions and events that occurred during January.
b. Prepare an income statement for Katherine’s Outdoor Furniture for January. Ignore income taxes.