Product versus general, selling, and administrative costs The following transactions pertain to 2007, the first-year operations of Kirby Company. All inventory was started and completed during 2007. Assume that all transactions are cash transactions.

1. Acquired $2,000 cash by issuing common stock.

2. Paid $400 for materials used to produce inventory.

3. Paid $600 to production workers.

4. Paid $200 rental fee for production equipment.

5. Paid $160 to administrative employees.

6. Paid $80 rental fee for administrative office equipment.

7. Produced 300 units of inventory of which 200 units were sold at a price of $7.00 each.

Required Prepare an income statement, balance sheet, and statement of cash flows.