=+EX 17-25 Income statement and earnings per share for extraordinary items and discontinued operations Discuss whether Baxter Company correctly reported the following items in the financial statements:

a. In 2010, the company discovered a clerical error in the prior year’s accounting records. As a result, the reported net income for 2009 was overstated by

$20,000. The company corrected this error by restating the prior-year financial statements.