Instructions

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

ventory Balances

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

Materials inventory, June $30$

Work in process inventory, June $30$

Finished goods inventory, June $30$

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b$.$ Set up T accounts for materials, work in process, and finished goods inventory accounts.