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

Retained earnings, January 1.................................$221,000

Cash 11,900 Salaries payable.....................................3,000

Utilities expense....................................................2,000

Equipment.........................................................66,000

Accounts payable.................................................15,000

Buildings...........................................................72,000

Common shares...................................................34,200

Dividends declared................................................5,000

Service revenue..................................................213,900

Prepaid insurance................................................$ 2,000

Repair and maintenance expense.................................2,800

Land...............................................................156,000

Depreciation expense..............................................6,200

Accounts receivable..............................................14,200

Insurance expense..................................................2,200

Salaries expense.................................................129,800

Accumulated depreciation-equipment.......................17,600

Income tax expense................................................6,000

Supplies...............................................................200

Operating expense................................................39,400

Supplies expense...................................................1,000

Bank loan payable, due 2021...................................15,000

Held for trading investments...................................20,000

Accumulated depredation-buildings........................18,000

Interest expense....................................................1,500

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

Additional information:

Mbong started the year with $30,000 of common shares and issued $4,200 more during the year.

$1,500 of the bank loan 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.