Answer:
<u>A.  income statement for Sorensen Manufacturing Company</u>
Sales                                                                            $329,500
Less Cost of Sales
Opening Finished Goods Inventory         $0 
Cost of Goods Manufactured              $184,300
Less Finished Goods Inventory           ($37,700)      $146,600
Gross Profit                                                                  $182,900
Less Expenses
selling expense                                                           ($84,300)
administrative expense                                               ($37,000)
Net Income or Loss                                                       $61,600
<u>B. inventory balances at the end of the first month of operations.</u>
Raw Materials Inventory =     $15,800
Work In Process Inventory  = $58,200
Finished Goods Inventory  =  $37,700
Explanation:
<u>Raw Materials Inventory Calculation :</u>
<em>Open a Raw Materials T - Account</em>
Debit :
Opening Balance                                         $0
Purchases                                                $68,500
Totals                                                       $68,500
Credit: 
Used in Production                                 $52,700
Closing Balance (Balancing figure)        $15,800
Totals                                                       $68,500
<u>Work In Process Inventory Calculation :</u>
<em>Make a Schedule of Manufacturing Cost</em>
Raw Materials                                        $52,700
direct labor wages                                 $78,800
factory overhead                                   $111,000
Total cost of Manufacture                   $242,500
Less Transfer to Finished Goods      ( $184,300)
Work In Process Inventory                    $58,200
<u>Finished Goods Inventory Calculation :</u>
Transfer to Finished Goods                 $184,300
Less Cost of Sales                               ($146,600)
Finished Goods Inventory                      $37,700