Solomon Manufacturing Company started operations on January 1, Year 1. During Year 1, the company engaged in the following transactions.

1. Issued common stock for $83,000.

2. Paid $27,000 cash to purchase raw materials used to make products.

3. Transferred $20,000 of raw materials to the production department.

4. Paid $31,000 cash for labor used to make products.

5. Paid $50,000 cash for overhead costs (assume actual and estimated overhead are the same).

6. Finished work on products that cost $77,000 to make.

7. Sold products that cost $65,000 to make for $89,500 cash.

Required

1. Prepare the December 31, Year 1, balance sheet.

2. Prepare the December 31, Year 1, income statement.

Required A Required B Prepare the December 31, Year 1, balance sheet. SOLOMON MANUFACTURING COMPANY Balance Sheet for Year 1 Assets Cash $ 64,500 Raw material inventory Work in process inventory 24,000 Finished goods inventory 12,000 7,000 107,500 Total assets Equity Common stock Retained earnings $ 83,000 24,500 Total equity 107,500