Tombert Company is a manufacturer of computers. Its controller resigned in October 2016. An inexperienced assistant accountant has prepared the following income statement for the month of October 2016.

Prior to October 2016, the company had been profitable every month. The company's president is concerned about the accuracy of the income statement. As his friend, he has asked you to review the income statement and make necessary corrections. After examining other manufacturing cost data, you have acquired the following additional information.
1. Inventory balances at the beginning and end of October were as follows:

2. Only 75% of the utilities expense and 60% of the insurance expense apply to factory operations. The remaining amounts should be charged to selling and administrative activities.
Instructions
Calculate the following:
(a) Prepare a schedule of the cost of goods manufactured for October 2016.
(b) Prepare a correct income statement for October 2016.

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TOMBERT COMPANY Income Statement For the Month Ended October 31,2016 Sales (net) Less: Operating expenses $780,000 Raw materials purchases Direct labour cost Advertising expense Selling and administrative salaries Rent on factory facilities Depreciation on sales equipment Depreciation on factory equipment Indirect labour cost Utilities expense Insurance expense $264,000 190,000 90,000 75,000 60,000 45,000 31,000 28,000 12,000 8,000 803,000 Net loss $(23,000) October October 31 Raw materials Work in process Finished goods $18,000 16,000 30,000 $29,000 14,000 45,000