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

1.Acquired $4,000 cash by issuing common stock.

2.Paid $700 for materials used to produce inventory.

3.Paid $1,830 to production workers.

4.Paid $862 rental fee for production equipment.

5.Paid $110 to administrative employees.

6.Paid $120 rental fee for administrative office equipment.

7.Produced 320 units of inventory of which 230 units were sold at a price of $13 each.

Required

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