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For December 31, 2012, the balance sheet of Baxter Corporation was as follows: Current Assets Liabilities Cash $ 12,000 Accounts payable $ 14,000 Accounts receivable

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

Current Assets

Liabilities

Cash

$

12,000

Accounts payable

$

14,000

Accounts receivable

17,000

Notes payable

22,000

Inventory

27,000

Bonds payable

52,000

Prepaid expenses

12,200

Fixed Assets

Stockholders Equity

Gross plant and equipment

$

252,000

Preferred stock

$

22,000

Less: Accumulated depreciation

50,400

Common stock

57,000

Paid-in capital

27,000

Net plant and equipment

201,600

Retained earnings

75,800

Total assets

$

269,800

Total liabilities and stockholders equity

$

269,800

Sales for 2013 were $230,000, and the cost of goods sold was 60 percent of sales. Selling and administrative expense was $23,000. Depreciation expense was 10 percent of plant and equipment (gross) at the beginning of the year. Interest expense for the notes payable was 12 percent, while the interest rate on the bonds payable was 14 percent. This interest expense is based on December 31, 2012 balances. The tax rate averaged 30 percent.

$2,200 in preferred stock dividends were paid and $3,836 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 12 percent. A new machine was purchased on December 31, 2013, at a cost of $37,000.

Accounts payable increased by 30 percent. Notes payable increased by $6,200 and bonds payable decreased by $11,000, both at the end of the year. The preferred stock, common stock, and capital paid in excess of par accounts did not change.

Prepare an income statement for 2013

Prepare a statement of retained earnings for 2013

Prepare a balance sheet as of December 31, 2013

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