Problem 10-21 Product versus selling, general, and administrative costs The following transactions pertain to 2015, the first-year operations of Bailey Company. All inventory was started and completed during 2015. Assume that all transactions are cash transactions. 1. Acquired $7,000 cash by issuing common stock. 2. Paid $2,800 for materials used to produce inventory. 3. Paid $1,900 to production workers. 4. Paid $1,300 rental fee for production equipment. 5. Paid $350 to administrative employees. 6. Paid $400 rental fee for administrative office equipment. 7. Produced 500 units of inventory of which 450 units were sold at a price of $17.50 each. Required Prepare an income statement, a balance sheet, and statement of cash flows