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

Acquired $4,400 cash by issuing common stock.

Paid $710 for materials used to produce inventory.

Paid $1,910 to production workers.

Paid $882 rental fee for production equipment.

Paid $120 to administrative employees.

Paid $116 rental fee for administrative office equipment.

Produced 340 units of inventory of which 260 units were sold at a price of $13 each.

Required

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