Thornton 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. 1. Acquired $55,000 cash by issuing common stock. 2. Paid $7,100 for the materials used to make its products, all of which were started and completed during the year. 3. Paid salaries of $4,200 to selling and administrative employees. 4. Paid wages of $6,200 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. 6. Paid $10,900 for manufacturing equipment. The equipment was acquired on January 1. It had a $1,900 estimated salvage value and a three-year useful life. 7. Sold inventory to customers for $25,000 that had cost $13,600 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 (IA), financing activity (FA).) Balance Sheet Income Statement Event No. Assets Stockholders' Equity Cash Flow Cash + Inventory + BV Manuf. Equip. + BV Office Furn. = Ret. Ear. Rev. Exp. = Common + stock 55,000 + Net Inc. 1 55,000 + + + = = 55,000 FA 2 + + + 3 + = + = 4 + = + = 5a + + = 5b + + + + + + + + + + + + = + + + + + + + + ++ - 6b + = + + + + + = 7a = = ++ 7b = Total 55,000 + + 0 0 0 + 0 - 55,000 + 0 0 0 = 0 55,000