• Procter & Gamble Manufacturing Company started operations on January 1, Year 1. During Year 1, the company engaged in the following transactions.
  1. Issued common stock for $55,000.
  2. Paid $18,000 cash to purchase raw materials used to make products.
  3. Transferred $16,000 of raw materials to the production department.
  4. Paid $22,000 cash for labor used to make products.
  5. Paid $27,000 cash for overhead costs (assume actual and estimated overhead are the same).
  6. Finished work on products that cost $65,000 to make.
  7. Sold products that cost $54,000 to make for $82,000 cash.

• Required:
  1. Prepare the December 31, Year 1, balance sheet.
  2. Prepare the December 31, Year 1, income statement.