The following events took place for Video Wave Manufacturing Company during January 2016, the first month of its operations as a producer of digital video monitors:

a. Purchased $133,200 of materials.

b. Used $94,080 of direct materials in production.

c. Incurred $180,320 of direct labor wages.

d. Incurred $211,680 of factory overhead.

e. Transferred $425,320 of work in process to finished goods.

f. Sold goods with a cost of $365,000.

g. Earned revenues of $652,000.

h. Incurred $86,520 of selling expense.

i. Incurred $71,250 of administrative expense.

Using the information given, complete the following:

a. Prepare the January 2016 income statement for Video Wave Manufacturing Company.

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