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Accounting
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Finch Company began operations on January 1, year 1, by issuing common stock for $32,000 cash. During year 1, Finch received $61,600 cash from revenue and incurred costs that required $51,600 of cash payments.
Prepare a GAAP-based income statement and balance sheet for Finch Company for year 1 under the following scenario:
Finch is a manufacturing company. The $51,600 was paid to purchase the following items:
(1) Paid $3,100 cash to purchase materials that were used to make products during the year.
(2) Paid $2,800 cash for wages of factory workers who made products during the year.
(3) Paid $24,900 cash for salaries of sales and administrative employees.
(4) Paid $20,800 cash to purchase manufacturing equipment. The equipment was used solely to make products. It had a four-year life and a $2,400 salvage value. The company uses straight-line depreciation.
(5) During year 1, Finch started and completed 2,100 units of product. The revenue was earned when Finch sold 1,750 units of product to its customers.
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