Question
The following events took place for Sorensen Manufacturing Company during January, the first month of its operations as a producer of digital video monitors:
Purchased $229,000 of materials.
Used $164,880 of direct materials in production.
Incurred $412,200 of direct labor wages.
Incurred $164,900 of factory overhead.
Transferred $696,200 of work in process to finished goods.
Sold goods for $1,099,200.
Sold goods with a cost of $618,300.
Incurred $196,900 of selling expense.
Incurred $114,500 of administrative expense.
Prepare the January income statement for Sorensen Manufacturing Company.
Purchased $229,000 of materials.
Used $164,880 of direct materials in production.
Incurred $412,200 of direct labor wages.
Incurred $164,900 of factory overhead.
Transferred $696,200 of work in process to finished goods.
Sold goods for $1,099,200.
Sold goods with a cost of $618,300.
Incurred $196,900 of selling expense.
Incurred $114,500 of administrative expense.
Prepare the January income statement for Sorensen Manufacturing Company.
Answers
GPT-4o mini
To prepare the income statement for Sorensen Manufacturing Company for January, we will follow the standard income statement format, which includes revenue, cost of goods sold (COGS), gross profit, selling expenses, administrative expenses, and net income.
### Sorensen Manufacturing Company
### Income Statement
### For the Month Ended January 31, 2023
**Revenue:**
- Sales Revenue: $1,099,200
**Cost of Goods Sold (COGS):**
- Cost of Goods Sold: $618,300
**Gross Profit:**
- Gross Profit = Sales Revenue - COGS
- Gross Profit = $1,099,200 - $618,300
- Gross Profit = $480,900
**Operating Expenses:**
- Selling Expenses: $196,900
- Administrative Expenses: $114,500
- Total Operating Expenses = Selling Expenses + Administrative Expenses
- Total Operating Expenses = $196,900 + $114,500
- Total Operating Expenses = $311,400
**Net Income:**
- Net Income = Gross Profit - Total Operating Expenses
- Net Income = $480,900 - $311,400
- Net Income = $169,500
### Summary:
- **Sales Revenue:** $1,099,200
- **Cost of Goods Sold:** $618,300
- **Gross Profit:** $480,900
- **Total Operating Expenses:** $311,400
- **Net Income:** $169,500
### Final Income Statement:
```
Sorensen Manufacturing Company
Income Statement
For the Month Ended January 31, 2023
Revenue:
Sales Revenue $1,099,200
Cost of Goods Sold:
Cost of Goods Sold $ 618,300
____________
Gross Profit $ 480,900
Operating Expenses:
Selling Expenses $ 196,900
Administrative Expenses $ 114,500
____________
Total Operating Expenses $ 311,400
Net Income $ 169,500
```
This completes the income statement for January for Sorensen Manufacturing Company.
### Sorensen Manufacturing Company
### Income Statement
### For the Month Ended January 31, 2023
**Revenue:**
- Sales Revenue: $1,099,200
**Cost of Goods Sold (COGS):**
- Cost of Goods Sold: $618,300
**Gross Profit:**
- Gross Profit = Sales Revenue - COGS
- Gross Profit = $1,099,200 - $618,300
- Gross Profit = $480,900
**Operating Expenses:**
- Selling Expenses: $196,900
- Administrative Expenses: $114,500
- Total Operating Expenses = Selling Expenses + Administrative Expenses
- Total Operating Expenses = $196,900 + $114,500
- Total Operating Expenses = $311,400
**Net Income:**
- Net Income = Gross Profit - Total Operating Expenses
- Net Income = $480,900 - $311,400
- Net Income = $169,500
### Summary:
- **Sales Revenue:** $1,099,200
- **Cost of Goods Sold:** $618,300
- **Gross Profit:** $480,900
- **Total Operating Expenses:** $311,400
- **Net Income:** $169,500
### Final Income Statement:
```
Sorensen Manufacturing Company
Income Statement
For the Month Ended January 31, 2023
Revenue:
Sales Revenue $1,099,200
Cost of Goods Sold:
Cost of Goods Sold $ 618,300
____________
Gross Profit $ 480,900
Operating Expenses:
Selling Expenses $ 196,900
Administrative Expenses $ 114,500
____________
Total Operating Expenses $ 311,400
Net Income $ 169,500
```
This completes the income statement for January for Sorensen Manufacturing Company.