ENG377 Engineering Economy Homework: Accounting Examples Manufacturing Income statement and balance sheet example: Example: A business has 7 transactions in its first year below. Determine its income statement and balance sheet. 1) 2) 3) 4) Organize XYZ firm and invest $3,000 cash as capital Purchase Equipment for a total cost of $2,000 by paying cash Borrow $1500 through a note to the bank Manufacture year's supply of inventory through the following Pay $1200 cash for labor incur $400 accounts payable for material Recognize the partial loss in value (depreciation) of the equipment amounting to $500 Sell on credit all goods produced for year, 1,000 units at $3 each. Recognize that the accounting cost of these goods is $2100, resulting in an increase in equity (through profits) of $900 Collect $2200 of accounts receivable Pay $300 of accounts payable and a $1000 of bank note 5) 6) 7)