Instructions: Based on the trial balance and the additional information, create a Balance Sheet and Income Statement for the year. Please do step by step with full explanation .

Chimichanga Inc.
Trial Balance
December 31, 2018
	Debit	Credit
Cash	7,000
A/R	3,000
Office Supplies (Asset)	3,000
Accounts Payable		1,000
Common Stock		10,000
Sales Revenue		7,000
Rent Expense	600
Salaries Expense	2,500
Supplies Expense	1,200
Utilities Expense	700
	18,000	18,000
Additional Info
Chimichanga Inc. bought a new food processing machine for $5,000 on January 1st 2018 and paid cash, with a useful life of 5 years, and a residual value of $1,000. This information is not yet accounted for in the Trial Balance above.