| Sales for 2013 were $290,000, and the cost of goods sold was 55 percent of sales. Selling and administrative expense was $29,000. Depreciation expense was 12 percent of plant and equipment (gross) at the beginning of the year. Interest expense for the notes payable was 8 percent, while the interest rate on the bonds payable was 16 percent. This interest expense is based on December 31, 2012 balances. The tax rate averaged 40 percent. | | $3,400 in preferred stock dividends were paid and $6,156 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 8 percent. A new machine was purchased on December 31, 2013, at a cost of $49,000. | | Accounts payable increased by 30 percent. Notes payable increased by $7,400 and bonds payable decreased by $17,000, 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)Depreciation expenseEarnings before taxesPreferred stock dividendsCost of goods soldTaxesSalesSelling and administrative expenseInterest expenseEarnings after taxes | $ | | (Click to select)TaxesSalesInterest expenseDepreciation expenseEarnings after taxesSelling and administrative expensePreferred stock dividendsEarnings before taxesCost of goods sold | | | |
| | (Click to select)Gross profitGross loss | $ | | (Click to select)Selling and administrative expenseDepreciation expensePreferred stock dividendsEarnings after taxesInterest expenseCost of goods soldTaxesEarnings before taxesSales | | | (Click to select)Depreciation expenseEarnings before taxesSalesInterest expensePreferred stock dividendsSelling and administrative expenseEarnings after taxesTaxesCost of goods sold | | | |
| | (Click to select)Operating profitOperating loss | $ | | (Click to select)Selling and administrative expenseTaxesEarnings after taxesEarnings before taxesDepreciation expensePreferred stock dividendsCost of goods soldInterest expenseSales | | | |
| | (Click to select)Depreciation expenseEarnings after taxesTaxesInterest expensePreferred stock dividendsSalesEarnings before taxesSelling and administrative expenseCost of goods sold | $ | | (Click to select)Earnings before taxesSelling and administrative expensePreferred stock dividendsEarnings after taxesCost of goods soldInterest expenseDepreciation expenseTaxesSales | | | |
| | (Click to select)Preferred stock dividendsCost of goods soldEarnings after taxesSelling and administrative expenseSalesInterest expenseTaxesEarnings before taxesDepreciation expense | $ | | (Click to select)Selling and administrative expenseInterest expenseSalesDepreciation expenseTaxesPreferred stock dividendsCost of goods soldEarnings after taxesEarnings before taxes | | | |
| | Earnings available to common stockholders | $ | | Shares outstanding | | | Earnings per share | $ |
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| b. | Prepare a statement of retained earnings for 2013. (Input all amounts as positive values.) BAXTER CORPORATION
2013 Income Statement | | (Click to select)Retained earnings balance, December 31, 2013Cash dividend declared in 2013Earnings available to common stockholders, 2013Retained earnings balance, January 1, 2013 | $ | | Add: (Click to select)Cash dividend declared in 2013Earnings available to common stockholders, 2013Retained earnings balance, January 1, 2013Retained earnings balance, December 31, 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)Cash dividend declared in 2013Retained earnings balance, December 31, 2013Earnings available to common stockholders, 2013Retained earnings balance, January 1, 2013 | $ | | |
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| 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)Gross plant and equipmentCashAccounts receivablePrepaid expensesInventory | | $ | | (Click to select)Preferred stockCommon stockRetained earningsAccounts payableCapital paid in excess of par | $ | | (Click to select)Gross plant and equipmentCashAccounts receivablePrepaid expensesInventory | | | | (Click to select)Accounts payableBonds payablePreferred stockNotes payableCommon stock | | | (Click to select)Accounts receivablePrepaid expensesCashGross plant and equipmentInventory | | | | (Click to select)Bonds payableCommon stockNotes payablePreferred stockAccounts payable | | | (Click to select)InventoryPrepaid expensesCashAccounts receivableGross plant and equipment | | | | | | | | |
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| | Total current assets | | $ | | Total liabilities | $ | | Fixed Assets | | Stockholders' Equity | | (Click to select)InventoryGross plant and equipmentPrepaid expensesAccounts receivableCash | $ | | | (Click to select)Preferred stockBonds payableCommon stockCapital paid in excess of parRetained earnings | $ | | (Click to select)Accounts receivableCashInventoryLess: Accumulated depreciationAdd: Accumulated depreciation | | | | (Click to select)Preferred stockRetained earningsCapital paid in excess of parBonds payableCommon stock | | | |
| | | (Click to select)Accounts payableBonds payableCapital paid in excess of parNotes payableRetained earnings | | | Net plant and equipment | | | | (Click to select)Accounts payableBonds payableCapital paid in excess of parNotes payableRetained earnings | | | | |
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| | | | | | Total stockholders' equity | $ | | | | | | |
| | Total assets | | $ | | Total liabilities and stockholders' equity | $ | | | |
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