Chapter 1, Problem 21PSB

To determine

The balance sheet and income statement according to GAAP.

Given information:

• Cash acquired is $64,000.
• $10,500 paid for materials that are used in producing inventory.
• $4,900 paid as rental fee for production equipment and $2,900 for administrative office equipment.
• Paid $2,100 to administrative employees.
• 1,200 units of inventory were produced, sold, and 1,100 units in that for $27 each.
• Paid $8,600 as wages to production workers