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

1. Acquired $4,300 cash by issuing common stock.

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

3. Paid $1,820 to production workers.

4. Paid $948 rental fee for production equipment.

5. Paid $120 to administrative employees.

6. Paid $112 rental fee for administrative office equipment.

7. Produced 340 units of inventory of which 220 units were sold at a price of $12 each.

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