Ithalid Company began business on January 1, 2006, with assets of $150,000 cash and equity of

$150,000 capital shares. In 2006 it manufactured some inventory at a cost of

$60,000, including $12,000 for factory rent and other fixed factory overhead. In 2007 it manufactured nothing and sold half of its inventory for $42,000 cash. In 2008 it manufactured nothing and sold the remaining half for another $42,000 cash. It had no fixed expenses in 2007 or 2008. There are no other transactions of any kind. Ignore income taxes.

Prepare an ending balance sheet plus an income statement for 2006, 2007, and 2008 under (1) absorption costing and (2) variable costing.