Problem 1-21A (Algo) Effect of product versus period costs on financial statements LO 1-3 16.7 points Gibson 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. eBook Print 1. Acquired $60,000 cash by Issuing common stock. 2. Pald $8,000 for the materials used to make its products, all of which were started and completed during the year. 3. Pald salaries of $3,800 to selling and administrative employees. 4. Pald wages of $6,800 to production workers. 5. Paid $8,100 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $1,700 estimated salvage value and a four-year useful life. 6. Paid $12,800 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 $25,500 that had cost $13,300 to make. References Required 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 decreases to account balances with a minus sign.) Balance Sheet Income Statement Event No. Cash Assets Manuf. + Inventory + Equip. + Office Furn. Equity Common stock 60.000 + + Rev. - Exp. = Net Inc. Ear. 60.000