Hebron Manufacturing Company started operations on January 1, 2019. During 2019, the company engaged in the following transactions:
1. Issued common stock for $100,000.
2. Paid $39,600 cash to purchase raw materials used to make products.
3. Transferred $36,000 of raw materials to the production department.
4. Paid $40,800 cash for labor used to make products.
5. Paid $31,200 cash for overhead costs (assume actual and estimated overhead are the same).
6. Finished work on products that cost $103,200 to make.
7. Sold products that cost $86,400 to make for $109,200 cash.
Required
a. Prepare the December 31, 2019, balance sheet.
b. Prepare the December 31, 2019, income statement.