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Problem 10-23A (Algo) Effect of product versus period costs on financial statements LO 10-2, 10-3 Franklin Manufacturing Company experienced the following accounting events during its first year of operation. With the exception of the adjusting entries for depreciation, assume that all transactions are cash transactions and that financial statement data are prepared in accordance with GAAP Acquired $cash by Issuing common 2. Pald 97.00 for the mostenis used to make mos preklucts, all of which were started andompleted during the years 3. Pald salaries of $4.400 to selling and administrative employees 4. Paid wages of $7,000 to production workers 5: Paid $4,600 for furniture used in selling and administrative offices. The furniture was acquired on January 1. It had a $2,000 estimated salvage value and a two-year useful life. 16. Paid $12.200 for manufacturing equipment. The equipment was acquired on January 1, it had a S1700 estimated salvage value and a three-year useful life 7. Sold inventory to customers for $25,600 that had cost $13,500 to make Required Indicate how these events would affect the balance sheet and income statement by recording them in a horizontal financial statements model as indicated here. The first event is recorded as an example (Enter any decreases to account balances with a minus sign. For changes on the Statement of Cash Flows, indicate whether the item is an operating activity (OA), investing activity (1A). financing activity (FA).) Balance Sheet Event No. Assets Income Statement Cash Flow Cash Inventory - BV Manul Equip BV Office Furn. Stockholders' Equity Common Ret stock Ear 50,000+ Rev. Exp Net Inc. 1 50.000 50.000 FA 2 - + 3 + 4 50 50 6 Balance Sheet Income Statement Cash Flow Event No. Assets EV Manul. - Inventory Equip Cash BV Office Furn Stockholders' Equity Common Ret stock 50,000+ Rev. Exp. Not Inc Este 50,000 FA 1 50,000 2 + . 3 4 . 50 50 - 70 O 50.000 0 Total 50.000 50.000