Gibson Manufacturing Company started operations on January 1, 2019. During 2019, the company engaged in the following transactions:

1. Issued common stock for $77,000.

2. Paid $36,000 cash to purchase raw materials used to make products.

3. Transferred $26,000 of raw materials to the production department.

4. Paid $28,000 cash for labor used to make products.

5. Paid $44,000 cash for overhead costs (assume actual and estimated overhead are the same).

6. Finished work on products that cost $86,000 to make.

7. Sold products that cost $71,000 to make for $93,500 cash.

Required

1. Prepare the December 31, 2019, balance sheet.

2. Prepare the December 31, 2019, income statement.