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

1. Issued common stock for $80,000.

2. Paid $21,000 cash to purchase raw materials used to make products.

3. Transferred $17,000 of raw materials to the production department.

4. Paid $29,500 cash for labor used to make products.

5. Paid $47,000 cash for overhead costs (assume actual and estimated overhead are the same).

6. Finished work on products that cost $71,000 to make.

7. Sold products that cost $62,000 to make for $85,000 cash.

Required

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

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