Balance Sheet; Income Statement. On December 31, 19A, Morrisville Canning Company, with outstanding common stock of $30,000, had the following assets and liabilities: LO1 Cash. $ 5,000 Accountsreceivable. 10,000 Finishedgoods. 6,000 Work inprocess. 2,000 Materials. 4,000 Prepaidexpenses. 500 Property, plant, and equipment(net). 30,000 Currentliabilities. 17,500 During 19B, the retained earnings balance increased 50% as a result of the year’s business. No dividends were paid during the year. Balances of accounts receivable, prepaid expenses, current liabilities, and common stock were the same on December 31, 19B, as they had been on December 31, 19A. Inventories were reduced by exactly 50%, except finished goods, which was reduced by 33'4%. Plant assets (net) were reduced by depre¬ ciation of $4,000, charged three-fourths to factory overhead and one-fourth to administrative expense. Sales of $60,000 were made on account, costing $38,000. Direct labor cost was $9,000. Factory overhead was applied at a rate of 100% of direct labor cost, leaving $2,000 underapplied, which was closed into the cost of goods sold account. Total marketing and administrative expenses (including depreciation) amounted to 10% and 15%, respectively, of the gross sales.

Required:

(1) Prepare a balance sheet as of December 31, 19B.

(2) Prepare an income statement for the year 19B, with details of the cost of goods manufactured and sold.