The following events took place for Sorensen Manufacturing Company during January, the first month of its operations as a producer of digital video monitors:

a. Purchased $250,000 of materials.

b. Used $180,000 of direct materials in production.

c. Incurred $450,000 of direct labor wages.

d. Incurred $180,000 of factory overhead.

e. Transferred $760,000 of work in process to finished goods.

f. Sold goods for $1,200,000.

g. Sold goods with a cost of $675,000.

h. Incurred $215,000 of selling expense.

i. Incurred $125,000 of administrative expense.

Using the information given, complete the following:

a. Prepare the January income statement for Sorensen Manufacturing Company.

b. Determine the inventory balances at the end of the first month of operations