The assets and liabilities of Japan Mechanics Ltd$.$ as of December $31,2020,$ and revenues and expenses for the year ended on that date follow.Interest expense.$ $4,000$ Accounts receivable.$ $25,000$Land....$\mathrm{.}95,000$Advertising expense$10,000$Note payable.$\mathrm{.}95,000$Building.$\mathrm{.}140,000$Accounts payable$21,000$Salary expense$85,000$Rent expense.$\mathrm{.}6,000$Salary payable$\mathrm{.}12,000$Cash$\mathrm{.}10,000$Service revenue$210,000$Common shares$\mathrm{.}75,000$Supplies$\mathrm{.}3,000$Furniture$20,000$Property tax expense$5,000$Beginning retained earnings were $$40,000,$ and dividends totalled $$50,000$ for the year.Requirements:a$)$ Prepare the income statement of Japan Mechanics Ltd$.$ for the year endedDecember $31,2020.$b$)$ Prepare the Japan Mechanics Ltd$.$ statement of retained earnings for the year.c$)$ Prepare Japan Mechanics' balance sheet at December $31,2020.$  

Answer rating: 100% (QA)

Lets start by preparing the income statement for Japan Mechanics Ltd for the year ended December 31 ... View the full answer