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Amazon Manufacturing Company started operations on January 1, Year 1. During Year 1, the company engaged in the following transactions. Issued common stock for $300,000.

  • Amazon Manufacturing Company started operations on January 1, Year 1. During Year 1, the company engaged in the following transactions.
    1. Issued common stock for $300,000.
    2. Paid $100,000 cash to purchase raw materials used to make products.
    3. Transferred $90,000 of raw materials to the production department.
    4. Paid $140,000 cash for labor used to make products.
    5. Paid $150,000 cash for overhead costs (assume actual and estimated overhead are the same).
    6. Finished work on products that cost $290,000 to make.
    7. Sold products that cost $250,000 to make for $380,000 cash.
  • Required:
    1. Prepare the December 31, Year 1, balance sheet.
    2. Prepare the December 31, Year 1, income statement.

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