27. For December 31, 20X1, the balance sheet of Baxter Corporation wax as follows: Advanced Problems 27. For December 31, 20X1, the balance sheet of Baxter Corporation was as follows: Sales for 202 were $245,000, and the cost of goods sold was 60 percent of sales. Selling and administrative expense was $24,500. Depreciation expense was 8 pereent of plant and equipment (gross) at the beginning of the year. Interest expense for the notes payable was 10 pereent, while the interest rate on the bonds payable was 12 pereent. This interest expense is based on December 31 . 201 balances, The tax rate averaged 20 percent. $2,$00 in preferred stock dividends were paid, and $5,500 in dividends were paid to common stockholders. There were 10,000 shares of common stock outstanding. During 202, the cash balance and prepaid expenses balances were unchanged. Accounts receivable and inventory increased by 10 percent. A new machine was purchased on December 31.202, at a cost of $40.000. Accounts payable increased by 20 percent. Notes payable increased by $6,500 and bonds payable decreased by $12,500, both at the end of the year. The preferred stock, common stock, and paid-in capital in excess of par accounts did not change. a. Prepare an income statement for 202. b. Prepare a statement of retained earnings for 202. c. Prepare a balance sheet as of December 31,202