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

1. Issued common stock for $84,000.

2. Paid $29,000 cash to purchase raw materials used to make products.

3. Transferred $21,000 of raw materials to the production department.

4. Paid $31,500 cash for labor used to make products.

5. Paid $51,000 cash for overhead costs (assume actual and estimated overhead are the same).

6. Finished work on products that cost $79,000 to make.

7. Sold products that cost $66,000 to make for $91,000 cash.

Required

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

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