Problem 10-23A (Algo) Effect of product versus period costs on financial statements LO 10-2, 10-3 Balid Manufacturing Company experienced the following accounting events during its first year of operation with the exception of the adjusting entries for depreciation assume that all transactions are cosh transactions and that financial statement data are prepared in accordance with GAAP 1 Acquired $56.000 cash by Issuing common stock 2 Paid $7500 for the materials used to make its products, all of which were started and completed during the year. 3. Paid salaries of $4.100 to selling and administrative employees 4 Paid wages of $7000 to production workers 5. Poid $7,300 for furniture used in selling and administrative offices. The furniture was acquired on January 1 It had a $1700 estimated salvage value and a four year useful life 6 Paid $9.200 for manufacturing equipment. The equipment was acquired on January 1 It had a $1.200 estimated salvage value and a two-year useful life 7 Sold inventory to customers for $26700 that had cost $13.900 to make Required Indicate how these events would affect the balance sheet and income statement by recording them in a horizontal financial statements modelos indicated here. The first event is recorded as an example (Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA). Investing activity (IA), financing activity (FA).) 4 Indicate how these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example (Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA), investing activity (IA), financing activity (FA).) Income Statement Event No Balance Sheet Assets BV Office BV Manut Inventory Equip Fum Cash Flow 032535 Cash Stockholders'Equity Common Ret Stock Eor 56,000+ Rev Exp Netine od 1 56.000 50.000 FA + 2 + 3 . . 4 5a 50 . 06 Ta 76 . o Total 55.000 56,000 56.000