The following transactions pertain to 2018, the first-year operations of Gibson Company. All inventory was started and completed during 2018. Assume that all transactions are cash transactions.
1. Acquired $12,000 cash by issuing common stock.
2. Paid $4,700 for materials used to produce inventory.
3. Paid $2,400 to production workers.
4. Paid $900 rental fee for production equipment.
5. Paid $350 to administrative employees.
6. Paid $400 rental fee for administrative office equipment.
7. Produced 400 units of inventory of which 360 units were sold at a price of $25 each.
Required
Prepare an income statement and a balance sheet in accordance with GAAP.