These items are taken from financial statements of Beaulieu Limited for the year ended December 31, 2018:

Cash.......................................................................................$ 11,170

Buildings................................................................................105,000

Accumulated depreciation-equipment...................................19,200

Accounts payable.......................................................................9,550

Salaries payable..........................................................................6,170

Common shares........................................................................45,000

Accumulated depreciation-buildings.....................................12,000

Accounts receivable...................................................................7,500

Prepaid insurance..........................................................................250

Equipment................................................................................32,000

Income tax expense....................................................................5,000

Long-term investments.............................................................20,000

Retained earnings, January 1....................................................34,000

Dividends declared....................................................................3,500

Service revenue......................................................................193,100

Depreciation expense.................................................................5,400

Insurance expense......................................................................2,400

Salaries expense.....................................................................145,600

Utilities expense.........................................................................3,700

Interest expense.........................................................................8,000

Interest revenue............................................................................500

Land......................................................................................145,800

Mortgage payable..................................................................175,800

Additional information:

Beaulieu started the year with $25,000 of common shares and issued $20,000 more during the year.

$35,100 of the mortgage payable is due to be repaid within the next year.

Instructions

(a) Prepare an income statement, statement of changes in equity, and statement of financial position for the year.

(b) Explain how each financial statement is related to the others.