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.

Acquired $12,000 cash by issuing common stock.

Paid $4,700 for materials used to produce inventory.

Paid $2,400 to production workers.

Paid $900 rental fee for production equipment.

Paid $350 to administrative employees.

Paid $400 rental fee for administrative office equipment.

Produced 400 units of inventory of which 360 units were sold at a price of $25 each.

Required

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