The following transactions pertain to 2018, the first year operations ofbThorton Company. All inventory was started and completed during 2018. Assume that all transactions are cash transactions.

1. Acquired $4,900 cash by issuing common stock. 2. Paid $720 for materials used to produce inventory. 3. Paid $1,850 to production workers. 4. Paid $966 rental fee for production equipment. 5. Paid $90 to administrative employees. 6. Paid $112 rental fee for administrative office equipment. 7. Produced 340 units of inventory of which 270 units were sold at a price of $13 each.

Prepare an income statement and a balance sheet in accordance with GAAP.