Problem 10-23A (Algo) Effect of product versus period costs on financial statements LO 10-2, 10-3 Rooney 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 cash transactions and that financial statement data are prepared in accordance with GAAP. 1. Acquired $54,000 cash by issuing common stock 2. Pald $7,900 for the materials used to make its products, all of which were started and completed during the year. 3. Pald salaries of $4.100 to seling and administrative employees. 4. Paid wages of $6,100 to production workers. 5. Paid $7,100 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1700 estimated salvage value and a three-year useful life. 6. Pald $13,400 for manufacturing equipment. The equipment was acquired on January 1. It had a $2,000 estimated salvage value and a three-year useful life. 7. Sold inventory to customers for $26.700 that had cost $13,000 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 activity (IA), financing activity (FA).) Balance Sheet Income Statement Event No. Assets Cash Flow Cash . Inventory BV Manut Equip Stockholders' Equity Common Rat stock Ear. 4 innl BV Office Furn Rov. Exp. Net Inc. + En ra indicate now these events would antect the balance sheet and income statement by recording them in a 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 (1A), financing activity (FA).) Balance Sheet Income Statement Event No. Assets Cash Flow Cash - Inventory - BV Manut Equip av Omice Fum Stockholders' Equity Common Ret stock Ear 54,000 Rev Exp. Not Inc 1 54,000 FA + 54,000 2 es + 3 . . 4 + Sa + . 50 Ba 6b 7a 7b Total +