These items are taken from financial statements of Beaulieu Limited for the year ended December 31, 2012:

Additional information:
1. Beaulieu started the year with $15,000 of common shares and issued $5,000 more during the year.
2. $10,000 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.

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Retained earnings, Jan. 1 Accumulated depreciation-buildings12,000 Accounts receivable Prepaid insurance Depreciation expense Insurance expense Salaries expense Utilities expense 3 8 Accumulated depreciation-equipment Accounts payable Salaries payable 19,200 Interest revenue Income tax expense Long-term investments 5,000 Mortgage payable