McGuire Corporation began operations in 2018. The company purchases computer equipment from manufacturers and then sells to retail stores. During 2018, the bookkeeper used a check register to record all cash receipts and cash disbursements. No other journals were used. The following is a recap of the cash receipts and disbursements made during the year. Cash receipts: Sale of common stock 50,000 Collections from customers 320,000 Borrowed from local bank on April 1, note signed requiring principal and interest at 12% to be paid on March 31, 2019 40,000 Total cash receipts 410,000 Cash disbursements: Purchase of merchandise 220,000 Payment of salaries and wages 80,000 Purchase of office equipment 30,000 Payment of rent on building 14,000 Miscellaneous expenses 10,000 Total cash disbursements 354,000

You are called in to prepare financial statements at December 31, 2018. The following additional information was provided to you: 1. Customers owed the company $22,000 at year-end. 2. At year-end, $30,000 was still due to suppliers of merchandise purchased on credit. 3. At year-end, merchandise inventory costing $50,000 still remained on hand. 4. Salaries and wages owed to employees at year-end amounted to $5,000. 5. On December 1, $3,000 in rent was paid to the owner of the building used by McGuire. This represented rent for the months of December through February. 6. The office equipment, which has a 10-year life and no salvage value, was purchased on January 1, 2018. Straight-line depreciation is used. Required: Prepare the income statement for 2018 and a balance sheet as of December 31, 2018.