On December 31, 20A, Loganville Canning Company, with outstanding common stock of $30,000, had the following assets and liabilities:
Cash ...................................................$ 5,000
Accounts Receivable .............................. 10,000
Finished Goods .................................... 6,000
Work in Process .................................... 2,000
Materials .............................................. 4,000
Prepaid Expenses .................................... 500
Property, Plant, and Equipment (net) ............ 30,000
Current Liabilities ................................. 17,500
During 20B, the retained earnings balance increased 50% as a result of the year's business. No dividends were paid during the year. Balances of accounts receivable, prepaid expenses, current liabilities, and common stock were the same on December 31, 20B, as they had been on December 31, 20A. Inventories were reduced by exactly 50%, except finished goods, which was reduced by 33 1/3%. Plant assets (net) were reduced by depreciation of $4,000, charged three-fourths to factory overhead and one-fourth to administrative expense. Sales of $60,000 were made on account, costing $38,000. Direct labor cost was $9,000. Factory overhead was applied at a rate of 100% of direct labor cost, leaving $2,000 under applied, which was closed into the cost of goods sold account. Total marketing and administrative expenses (including depreciation) amounted to 10% and 15%, respectively, of the gross sales.
Required:
(1) Prepare a balance sheet as of December 31, 20B.
(2) Prepare an income statement for the year 20B, with details of the cost of goods manufactured and sold.