For December 31, 2000, the balance sheet of the Baxter Corporation is as follows:

Sales for the year 2011 were $220,000, and the cost of goods sold was 60% of sales. Selling and administrative expense was $22,000. Depreciation expense was 8% of gross plant and equipment at the be-ginning of the year. Interest expense for the notes payable was 10%, and interest on the bonds payable was 12%. These interest expenses are based on December 31, 2010, balances. The tax rate averaged 20%.

$2,000 in preferred stock dividends were paid and $8,400 in dividends were paid to common stockholders. There were 10,000 shares of common stock outstanding. During 2011, the cash balance and pre-paid expenses balance were unchanged. Accounts receivable and inventory increased by 10%.

A new machine was purchased on December 31, 2011, at a cost of $35,000, for which depreciation would start from year 2012. Accounts payable increased by 25%. Notes payable increased by $6,000 and bonds payable decreased by $10,000, both at the end of the year. The common stock and paid-in capital in excess of par accounts did not change.

A. Prepare an income statement for 2011.

B. Prepare a statement of retained earnings for 2011.

C. Prepare a balance sheet as of December 31, 2011.

D. Prepare a statement of cash flow for 2011.

E. Prepare a common-size income statement for both 2010 and 2011.

F. Prepare a common-size balance sheet for 2011.

BAXTER CORPORATION Balance Sheet December 31,2010 Current Asset Liabilities Cash Accounts receivable Inventory Prepaid Expense $10,000 15,000 25,000 12,000 Accounts payable Note Payable Bonds Payable S12,000 20,000 50,000 Fixed Assets Stockholders' Equity Plant& equipment (gross) Less: Accumulated Depreciation Net plant and assets S250,000 50,000 200,000 Common stock Paid-in capital Retained earnings $75,000 25,000 80,000 Total assets S262,000 Tota iabilities & equit $262,000