Question

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

Acquired $4,300 cash by issuing common stock. Paid $680 for materials used to produce inventory. Paid $1,820 to production workers. Paid $1,105 rental fee for production equipment. Paid $100 to administrative employees. Paid $111 rental fee for administrative office equipment. Produced 350 units of inventory of which 230 units were sold at a price of $13 each.

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

JORDAN COMPANY Income Statement for 2018 Sales revenue 2,990 Gross margin 2,990 Net income 2,990

Answer 1

Income statement				cost of goods manufactured
sales revenue		2990		Material used	680
less cost of goods sold		2369		production wages	1820
gross profit		621		rental fee for production equipment	1105
less salary to administrative employees		100		cost of goods manufactured	3605
less rental fees for administrative office equipment		111		cost of goods sold =( 3650/350)*230	2369
net income		410
Balance sheet				cash account
Assets				Cash proceeds from common stock	4300
cash		3474		cash from sales	2990
Inventory	3605-2369	1236		total cash inflow		7290
				less cash outflow
total of assets		4710		Material used	680
				production wages	1820
Liabilities and shareholders equity				rental fee for production equipment	1105
Liabilities		0		salary to administrative employees	100
shareholders equity				rental fees for administrative office equipment	111
common stock		4300		total cash outflow		3816
retained earnings		410		year end cash balance		3474
total of liabilities and shareholders equity		4710