Question - The following events took place for Wreckin Ronnie Inc during July 2009, the first month of operations as a producer of road bikes:

Purchased 165,800 of materials

Used 147,600 of direct materials in production

Incurred 96,250 of direct labor wages

Applied factory overhead at a rate of 80% of direct labor cost

Transferred 302,900 of work in process to finished goods

Sold goods with a cost of 301,300

Sold goods for 520,000

Incurred 119,000 of selling expenses

Incurred 52,100 of administrative expenses

a. Prepare the July income statement for Wrecker Ronnie. Assume that Wrecker Ronnie uses the perpetual inventory method.

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