Mano Company was started in Year 1 when it acquired $40,000 from the issue of common stock. The following data summarize the company’s first three years’ operating activities. Assume that all transactions were cash transactions.

Required
Prepare an income statement (use the multistep format) and balance sheet for each fiscal year.

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Purchases of inventory Sales Cost of goods sold Selling and administrative expenses Year 1 $30,000 42,000 22,000 6,500 Year 2 $36,000 56,000 39,000 9,100 Year 3 $57,000 72,000 51,000 11,200