Chec For December 31, 20X1, the balance sheet of Baxter Corporation was as follows: Current Assets Cash Accounts receivable Inventory Prepaid expenses Fixed Assets Gross plant and equipment Less: Accumulated depreciation $ 27,000 35, eee 65,000 Liabilities $ 25,000 Accounts payable 30,000 Notes payable 40,000 Bonds payable 13,500 Stockholders' Equity $ 265,608 Preferred stock (53,000) Common stock Paid in Capital 5 212,eee Retained earnings OOK Net plant and equipment Total assets $ 35,000 70,000 40,000 48, see $320, 500 int $ 320,50 Total liabilities and stockholders' equity onces Sales for 20x2 were $295,000, and the cost of goods sold was 60 percent of sales. Selling and administrative expense was $29.500 Depreciation expense was 8 percent of plant and equipment (gross) at the beginning of the year. Interest expense for the notes payable was 10 percent while the interest rate on the bonds payable was 12 percent. This interest expense is based on December 31, 20x1 balances. The tax rate averaged 20 percent. $3,500 in preferred stock dividends were paid and $4,950 in dividends were paid to common stockholders. There were 10,000 shares of common stock outstanding During 20x2, 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, 20x2, at a cost of $50,000. Accounts payable increased by 35 percent. Notes payable increased by $7,500 and bonds payable decreased by $17.500, both at the end of the year. The preferred stock, common stock, and capital paid in excess of par accounts did not change. a. Prepare an income statement for 20x2. (Round EPS answer to 2 decimal places.) Baxter Corporation 20X2 Income Statement to search c BE Accounts payable increased by 35 percent. Notes payable increased by $7,500 and bonds payable decreased by $17.500, both at the end of the year. The preferred stock, common stock, and capital paid in excess of par accounts did not change. a. Prepare an income statement for 20X2. (Round EPS answer to 2 decimal places.) Baxter Corporation $ 295,000 177,000 $ 118,000 21,200 29,500 $ 67,300 20X2 Income Statement Sales Cost of goods sold Gross profit Depreciation expense Selling and administrative expense Operating profit Interest expense Earnings before taxes Taxes Earnings after taxes Preferred stock dividends Earnings available to common stockholders Shares outstanding Earnings per share $ 67,300 $ 67,300 $ 67,300 b. Prepare a statement of retained earnings for 20X2 Prey 9 of 10 Next > b. Prepare a statement of retained earnings for 20x2. S Baxter Corporation 20x2 Statement of Retained Earnings Retained earnings balance, January 1, 20X2 Retained earnings balance, December 31, 20X2 c. Prepare a balance sheet as of December 31, 20X2 (Amounts to be deducted should be indicated with parentheses or a minus sign.) Baxter Corporation 20x2 Balance Sheet Liabilities and Stockholders' Equity Assets Current Assets: + Total current assets Total liabilities $ 0 Stockholders' Equity Fixed assets Net plant and equipment $ 0 Total stockholders' equity 0 Total liabilities and stockholders' equity $ 0 Total assets S S 0