n 10-23A (Algo) Effect of product versus period costs on financial statements LO 10-2, 10-3 Aanufacturing Company experienced the following accounting events during its first year of operation. With the exception of ting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared ance with GAAP ired $51,000 cash by issuing common stock. $7,700 for the materials used to make its products, all of which were started and completed during the year. salaries of $3,900 to selling and administrative employees. wages of $6,500 to production workers. $8,700 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,500 ated salvage value and a four-year useful life. $8,300 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,500 estimated salvage value and year useful life. inventory to customers for $25,900 that had cost $13,300 to make. low these events would affect the balance sheet and income statement by recording them in a horizontal financial is model as indicated here. The first event is recorded as an example. (Enter any decreases to account balances with a in. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA), investing activity icing activity (FA).) Answer is complete but not entirely correct. Balance Sheet Income Statement Event No Cash Flow Cash Inventory BV Manut Equip BV Office Furn Exp. Netine 1 - . 2 3 7,700 OO FA OA - 00 0 = 4 03 O. Stockholders' Equity Common Rot stock Ear Rev 51.000 + 0. o DI (3.000) 0 (6.500) OC (1800) 01 o 0 13,400) 0 0. 25.900 25,000 0. (13,300) 51.000 (3,000) 25.000 OA 1 ( ( 51.000 (7.700) + (3,900) (6,500) (8.700) 01. (8,300) - 25,000 0 41,800 00 + 0 . 5b ol 0 0. 0. 0+ 8.300. (3400) 0- 0+ 4,900 +0 @o - 0 - 0 20 - Ba 51,000 (7.700) (3.900) 3.000) (6.500) (6,500) (8.700) (1.800) o (8,300) (3.4001 o 25.90025,900 (13.300) 0 (3.000) 41.800 0= 3.900 5,500 - 0 1.800 0- 3,400 0- 13.300 28,900 8,700 (1,8001 - 0 0 0- 0- 6,900 IA 60 OOOOOO 7a CA 75 Tous (13,300) (5.600) +