4 Problem 10-23A (Algo) Effect of product versus period costs on financial statements LO 10-2, 10-3 Franklin Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP 1. Acquired $58,000 cash by issuing common stock 2. Paid $7700 for the materials used to make its products, all of which were started and completed during the year. 3. Paid salaries of $4,100 to selling and administrative employees 4 Paid wages of $6,700 to production workers 5. Paid $5,300 for furniture used in selling and administrative offices. The furniture was acquired on January 1 It had a $1.400 estimated selvage value and a three year useful life 6. Pald $8,500 for manufacturing equipment. The equipment was acquired on January 1. It had a $1700 estimated selvage value and two year useful life. 7. Sold inventory to customers for $25.300 that had cost $13,500 to make 4 Required Indicate how these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example, Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA), investing activity A financing activity (FA) 4 Do Income Statement Cash Flow Cash BV Manut BV Office Fum Stockholders Commons Net oc 5 000 notory Exp Netine 58.000 FA 50.000 - + fo 4