For December 31, 2012, the balance sheet of Baxter Corporation was as follows:

Current Assets			Liabilities
Cash	$	30,000	Accounts payable	$	32,000
Accounts receivable		35,000	Notes payable		40,000
Inventory		45,000	Bonds payable		70,000
Prepaid expenses		14,000
Fixed Assets			Stockholders Equity
Gross plant and equipment	$	270,000	Preferred stock	$	40,000
Less: Accumulated depreciation		54,000	Common stock		75,000
			Paid-in capital		45,000
Net plant and equipment		216,000	Retained earnings		38,000
Total assets	$	340,000	Total liabilities and stockholders equity	$	340,000

Sales for 2013 were $320,000, and the cost of goods sold was 50 percent of sales. Selling and administrative expense was $32,000. 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, 2012 balances. The tax rate averaged 40 percent.

$4,000 in preferred stock dividends were paid and $7,000 in dividends were paid to common stockholders. There were 10,000 shares of common stock outstanding.

During 2013, 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, 2013, at a cost of $55,000.

Accounts payable increased by 25 percent. Notes payable increased by $8,000 and bonds payable decreased by $20,000, 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 2013. (Round EPS answer to 2 decimal places. Input all amounts as positive values.)

BAXTER CORPORATION 2013 Income Statement
(Click to select)Earnings before taxesSalesInterest expenseSelling and administrative expenseEarnings after taxesCost of goods soldDepreciation expenseTaxesPreferred stock dividends	$
(Click to select)Preferred stock dividendsDepreciation expenseInterest expenseSalesEarnings before taxesTaxesCost of goods soldEarnings after taxesSelling and administrative expense
(Click to select)Gross lossGross profit	$
(Click to select)Earnings before taxesInterest expensePreferred stock dividendsDepreciation expenseCost of goods soldSelling and administrative expenseEarnings after taxesTaxesSales
(Click to select)Selling and administrative expenseEarnings before taxesPreferred stock dividendsTaxesEarnings after taxesCost of goods soldSalesInterest expenseDepreciation expense
(Click to select)Operating lossOperating profit	$
(Click to select)Interest expenseTaxesSelling and administrative expenseSalesEarnings before taxesDepreciation expenseCost of goods soldEarnings after taxesPreferred stock dividends
(Click to select)Depreciation expenseInterest expenseEarnings before taxesEarnings after taxesPreferred stock dividendsTaxesCost of goods soldSalesSelling and administrative expense	$
(Click to select)Earnings after taxesTaxesCost of goods soldDepreciation expenseSalesPreferred stock dividendsSelling and administrative expenseInterest expenseEarnings before taxes
(Click to select)SalesEarnings before taxesPreferred stock dividendsCost of goods soldDepreciation expenseSelling and administrative expenseInterest expenseEarnings after taxesTaxes	$
(Click to select)Cost of goods soldEarnings after taxesSalesSelling and administrative expenseInterest expenseEarnings before taxesDepreciation expensePreferred stock dividendsTaxes
Earnings available to common stockholders	$
Shares outstanding
Earnings per share	$

b.	Prepare a statement of retained earnings for 2013. (Input all amounts as positive values.)

BAXTER CORPORATION 2013 Income Statement
(Click to select)Cash dividend declared in 2013Retained earnings balance, January 1, 2013Retained earnings balance, December 31, 2013Earnings available to common stockholders, 2013	$
Add: (Click to select)Retained earnings balance, December 31, 2013Cash dividend declared in 2013Earnings available to common stockholders, 2013Retained earnings balance, January 1, 2013
Less: (Click to select)Retained earnings balance, December 31, 2013Retained earnings balance, January 1, 2013Earnings available to common stockholders, 2013Cash dividend declared in 2013
(Click to select)Retained earnings balance, December 31, 2013Cash dividend declared in 2013Retained earnings balance, January 1, 2013Earnings available to common stockholders, 2013	$

c.	Prepare a balance sheet as of December 31, 2013. (Be sure to list the assets and liabilities in order of their liquidity. Input all amounts as positive values.)

BAXTER CORPORATION 2013 Balance Sheet
Current Assets				Liabilities
(Click to select)InventoryPrepaid expensesGross plant and equipmentCashAccounts receivable		$		(Click to select)Retained earningsCapital paid in excess of parAccounts payableCommon stockPreferred stock	$
(Click to select)InventoryPrepaid expensesAccounts receivableCashGross plant and equipment				(Click to select)Preferred stockCommon stockBonds payableNotes payableAccounts payable
(Click to select)Prepaid expensesGross plant and equipmentAccounts receivableInventoryCash				(Click to select)Common stockAccounts payableNotes payableBonds payablePreferred stock
(Click to select)Prepaid expensesAccounts receivableCashGross plant and equipmentInventory
Total current assets		$		Total liabilities	$
Fixed Assets				Stockholders' Equity
(Click to select)CashInventoryGross plant and equipmentPrepaid expensesAccounts receivable	$			(Click to select)Preferred stockCommon stockRetained earningsBonds payableCapital paid in excess of par	$
(Click to select)InventoryCashAccounts receivableAdd: Accumulated depreciationLess: Accumulated depreciation				(Click to select)Common stockBonds payableRetained earningsCapital paid in excess of parPreferred stock
				(Click to select)Retained earningsBonds payableNotes payableAccounts payableCapital paid in excess of par
Net plant and equipment				(Click to select)Retained earningsBonds payableCapital paid in excess of parAccounts payableNotes payable
				Total stockholders' equity	$
Total assets		$		Total liabilities and stockholders' equity	$