The following transactions pertain to Year 1, the first-year operations of Rooney Company. All inventory was started and completed during Year 1. Assume that all transactions are cash transactions.

1. Acquired $4,600 cash by issuing common stock.

2. Paid $680 for materials used to produce inventory.

3. Paid $1,800 to production workers.

4. Paid $848 rental fee for production equipment.

5. Paid $100 to administrative employees.

6. Paid $117 rental fee for administrative office equipment.

7. Produced 320 units of inventory of which 220 units were sold at a price of $13 each.

Required

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