Question

The following transactions pertain to year 1, the first-year operations of Adams Company. All inventory was started and complet during year 1. ASsume that all transactions are cash transactions. 1. Acquired $4,200 cash by issuing common stock. 2. Paid $680 for materials used to produce inventory. 3. Paid $1,940 to production workers. 4. Paid $868 rental fee for production equipment. 5. Paid $90 to administrative employees. 6. Paid $106 rental fee for administrative office equipment. 7. Produced 320 units of inventory of which 230 units were sold at a price of $14 each. Required Prepare an income statement and a balance sheet in accordance with GAAP. Complete this question by entering your answer in the tabs below. Income Statement Balance Sheet Prepare a balance sheet in accordance with GAAP. (Do not round your intermediate calculations.)

Answer 1

Income Statement			Calculations:
	Amount$
Revenues	3220		230*14
Less:Cost of Goods Sold:
Material	680
wages	1940
Prod Eq Rental	868
Total	3488
Less:FG Inventory	981		3488*90/320
COGS	2507
Gross Profit	713
Less:Admin Exp.:
Adminis Salary	90
Admin Eq. rental	106
Net Income	517
Balance Sheet:
Assets:	Amount$
Cash	3736
FG Inventory	981		(4200-680-1940-868-90-106+3220)
Current Assets	4717
Fixed Assets	0
Total Assets	4717
Liabilities & Equity:	Amount$
Liabilities	0
Equity:
Common Stock	4200
Retained Earnings:
Net Income	517
Total Liabilities & Equity	4717