The following events took place for Sorensen Manufacturing Company during January, the first month of its operations as a producer of digital video monitors: a. Purchased $260,000 of materials.
b. Used $187,200 of direct materials in production.
c. Incurred $468,000 of direct labor wages.
d. Incurred $187,200 of factory overhead.
e. Transferred $790,400 of work in process to finished goods.
f. Sold goods for $1,248,000.
g. Sold goods with a cost of $702,000.
h. Incurred $223,600 of selling expense.
i. Incurred $130,000 of administrative expense.

Required:
a. Prepare the July income statement for Focault. Assume that Focault uses the perpetual inventory method.
b. Determine the inventory balances at the end of the first month of operations.