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The following transactions pertain to 2018, the first year operations ofbThorton Company. All inventory was started...

The following transactions pertain to 2018, the first year operations ofbThorton Company. All inventory was started and completed during 2018. Assume that all transactions are cash transactions.

1. Acquired $4,900 cash by issuing common stock.
2. Paid $720 for materials used to produce inventory.
3. Paid $1,850 to production workers.
4. Paid $966 rental fee for production equipment.
5. Paid $90 to administrative employees.
6. Paid $112 rental fee for administrative office equipment.
7. Produced 340 units of inventory of which 270 units were sold at a price of $13 each.

Prepare an income statement and a balance sheet in accordance with GAAP.

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PREPARE INCOME STATEMENT :
Sales (270*13)      3,510
Less: Cost of goods sold
Material used         720
Direct labour      1,850
Manufacturing overhead         966
Total cost of goods manufactured      3,536
Less: Ending inventory (3536*70/340)        -728
Cost of goods sold     -2,808
Gross profit         702
Less: Operating expenses
Administrative salaries          -90
Rental fee for office equipemnt        -112        -202
Net income         500
BALANCE SHEET :
ASSETS
CURRENT ASSETS
Cash( 4900-720-1850-966-90-112+3510)      4,672
Inventory         728      5,400
NON CURRENT ASSETS
TOTAL ASSETS      5,400
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES
LONG TERM LIABILITIES
SHAREHOLDER'S EQUITY
Common stock      4,900
Net income         500
TOTAL SHAREHOLDER'S EQUITY      5,400
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY      5,400
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