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

1. Acquired $5,000 cash by issuing common stock.

2. Paid $660 for materials used to produce inventory.

3. Paid $1,940 to production workers.

4. Paid $997 rental fee for production equipment.

5. Paid $110 to administrative employees.

6. Paid $105 rental fee for administrative office equipment.

7. Produced 330 units of inventory of which 270 units were sold at a price of $14 each.

Required

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