Ito Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, all transactions were cash transactions. Also, assume that all financial statement data are prepared in accordance with GAAP.
1. Acquired $87,000 cash by issuing common stock.
2. Paid $17,000 for the materials used to make its products. All products started were completed during the period.
3. Paid salaries of $7,000 to selling and administrative employees.
4. Paid wages of $10,000 to production workers.
5. Paid $12,000 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,500 estimated salvage value and a seven-year useful life.
6. Paid $18,000 for manufacturing equipment. The equipment was acquired on January 1. It had a $3,000 estimated salvage value and a five-year useful life.
7. Sold inventory to customers for $58,000 that had cost $26,000 to make.
Required
Explain how these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example.

*Record accumulated depreciation as negative amounts in these columns.

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Financlal Statements Model Assets lijulh@ Event No. Manuf. Offlce Com. Ret. Stk. + Ear. Cash + Inventory + Equip" + Fum.* Rev.-Exp.-Net Inc. 87,000 87,000