Question - The following events took place for Salsa Inc. during May 2010, the first month of operations as a producer of road bikes:
- Purchased $244,000 of materials.
- Used $210,000 of direct materials in production.
- Incurred $180,000 of direct labor wages.
- Applied factory overhead at a rate of 75% of direct labor cost.
- Transferred $510,000 of work in process to finished goods.
- Sold goods with a cost of $485,000.
- Sold goods for $870,000.
- Incurred $210,000 of selling expenses.
- Incurred $75,400 of administrative expenses.
Negative and subtractive numbers are to be entered as positive numbers.
Prepare the May income statement for Salsa. Assume that Salsa uses the perpetual inventory method.