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Required information

Problem $10-26$A $($Algo$)$ Service versus manufacturing companies LO $10-4$

$[$The following information applies to the questions displayed below.$]$

Zachary Company began operations on January $1,$ Year $1,$ by issuing common stock for $$38,000$ cash. During Year

$1,$ Zachary received $$63,600$ cash from revenue and incurred costs that required $$49,600$ of cash payments.

Problem $10-26$A $($Algo$)$ Part c

Prepare a GAAP$-$based income statement and balance sheet for Zachary Company for Year $1$ under the following scenario:

c$.$ Zachary is a manufacturing company. The $$49,600$ was paid to purchase the following items:

$(1)$ Paid $$3,500$ cash to purchase materials that were used to make products during the year.

$(2)$ Paid $$29,400$ cash for wages of factory workers who made products during the year.

$(3)$ Paid $$1,900$ cash for salaries of sales and administrative employees.

$(4)$ Paid $$14,800$ cash to purchase manufacturing equipment. The equipment was used solely to make products. It had a three$-$year life and a $$2,200$ salvage value. The company uses straight$-$line depreciation.

$(5)$ During Year $1,$ Zachary started and completed $2,400$ units of product. The revenue was earned when Zachary sold $2,000$ units of product to its customers.