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.

Acquired $4,700 cash by issuing common stock.

Paid $640 for materials used to produce inventory.

Paid $1,990 to production workers.

Paid $780 rental fee for production equipment.

Paid $110 to administrative employees.

Paid $111 rental fee for administrative office equipment.

Produced 310 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.