Problem 1-22B Product versus SG&A costs The following transactions pertain to 2018, the first year of operations of Fuzhou Company. All inven- tory was started and completed during the accounting period. All transactions were cash transactions. 1. Acquired $50,000 of contributed capital from its owners. 2. Paid $10,500 for materials used to produce inventory. 3. Paid $8,600 to production workers. 4. Paid $4,900 rental fee for production equipment. 5. Paid $2,100 to administrative employees.

6. Paid $2,900 rental fee for administrative office equipment

7. Produced 1,200 units of inventory of which 1,100 units were sold at a price of $27 each.

Required: Prepare an income statement and a balance sheet. Assume the statements are prepared in accordance with GAAP