For December 31, 20X1, the balance sheet of Baxter Corporation was as follows: Current Assets Liabilities Cash $ 24,000 Accounts payable $ 26,000 Accounts receivable 29,000 Notes payable 34,000 Inventory 39,000 Bonds payable 64,000 Prepaid expenses 13,400 Fixed Assets Stockholders Equity Gross plant and equipment $ 264,000 Preferred stock $ 34,000 Less: Accumulated depreciation (52,800) Common stock 69,000 Paid in Capital 39,000 Net plant and equipment $ 211,200 Retained earnings 50,600 Total assets $ 316,600 Total liabilities and stockholders equity $ 316,600 Sales for 20X2 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, 20X1 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 20X2, 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, 20X2, 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 20X2. (Round EPS answer to 2 decimal places.) b. Prepare a statement of retained earnings for 20X2. c. Prepare a balance sheet as of December 31, 20X2. (Amounts to be deducted should be indicated with parentheses or a minus sign.)