McGuire Corporation began operations in 2021. The company purchases computer equipment from manufacturers and then sells to retail stores. During 2021, 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:
Issue of common stock	$	60,000
Collections from customers		305,000
Borrowed from local bank on April 1, note signed requiring
principal and interest at 12% to be paid on March 31, 2022		31,000
Total cash receipts	$	396,000
Cash disbursements:
Purchase of merchandise	$	187,500
Payment of salaries		71,500
Purchase of office equipment		36,000
Payment of rent on building		9,750
Miscellaneous expense		11,300
Total cash disbursements	$	316,050

You are called in to prepare financial statements at December 31, 2021. The following additional information was provided to you:

1. Customers owed the company $17,500 at year-end.
2. At year-end, $28,350 was still due to suppliers of merchandise purchased on credit.
3. At year-end, merchandise inventory costing $44,600 still remained on hand.
4. Salaries owed to employees at year-end amounted to $4,650.
5. On December 1, $2,550 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, 2021. Straight-line depreciation is used.

Required:

Prepare an income statement for 2021 and a balance sheet as of December 31, 2021.