Problem 10-23A (Algo) Effect of product versus period costs on financial statements LO 10-2, 10-3 Solomon Manufacturing Company experienced the following accounting events during its first year of operation. With the exception the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepare in accordance with GAAP. 1. Acquired $58,000 cash by issuing common stock. 2. Paid $7,800 for the materials used to make its products, all of which were started and completed during the year. 3. Paid salaries of $3,400 to selling and administrative employees. 4. Paid wages of $6,400 to production workers. 5. Paid $4,400 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $2,000 estimated salvage value and a two-year useful life. 6. Paid $12,400 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,600 estimated salvage value and a three-year useful life. 7. Sold inventory to customers for $25,000 that had cost $13,500 to make. Required 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 activ (IA), financing activity (FA).)