Eric Shehan is a student working on an internship at Mahon Ltd. On December 31, 2020, the company had its year end. Eric’s boss brought him the following information:

These account amounts are correct, but Eric’s boss advised him that the information did not reflect the following information:

1. Accrued interest of $6,000 on the notes receivable.

2. Employees earned $80,000 in bonuses based on achieving sales targets. These are payable on January 10, 2021.

3. Accrued interest on the note payable amounting to $5,000 is due in January 2021.

4. As of December 31, 2020, the supplies still on hand had a cost of $7,000.

5. The insurance expense includes $3,000 in premiums related to coverage for 2021.

6. Depreciation for 2020 is $168,000 on the equipment.

7. The company’s board declared additional dividends of $250,000, which are payable to shareholders on January 15, 2021.

Required

a. Determine the amounts that would appear in an adjusted trial balance for Mahon Ltd. as at December 31, 2020.

b. Prepare a statement of income for the year ended December 31, 2020.

c. Calculate the amount of retained earnings as at December 31, 2020.

d. Prepare a classified statement of financial position as at December 31, 2020. The note receivable and note payable are due in 2021.

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Accounts Payable Cash $ 217,000 Wages Expense Notes Receivable $ 360,000 200,000 33,000 116,000 Notes Payable 250,000 Rent Expense Inventory 310,000 Dividends Declared 180,000 Common Shares 348,000 Supplies 11,000 Sales Revenue 3,410,000 Insurance Expense 16,000 Retained Earnings (at January 1, 2020) 1,142,000 Equipment 1,688,000 Accumulated Depreciation, Equipment Cost of Goods Sold 2,046,000 160,000 Utilities Expense 86,000 Miscellane ous Expense 32,000 Interest Revenue 9,000 Accounts Receivable 426,000 Unearned Revenue 29,000 Interest Expense 7,000 Advertising Expense 54,000