I am not positive how they got the 11220 on the Interest Expense.

homework 1 Thanks for rating! Rate 4 more documents to earn a free unlock. 16 Cash of 41 Current Assets Accounts receivable Inventory Prepaid expenses Fixed Assets Gross plant and equipment Less: Accumulated depreciation Net plant and equipment Total assets 18,000 23,000 33,000 12,800 $ 258,000 51 ,600 206,400 $293,200 Sales for 2013 were $260,000, and the 400/0 Liabilities Accounts payable Notes payable Bonds payable Stockholders' Equity Preferred stock Common stock Paid-in capital Retained earnings Total liabilities and stockholders' equity cost of goods sold was 55 percent of 20,000 28,000 58,000 28,000 63,000 33,000 63,200 $ 293,200 sales. Selling and administrative expense was $26,000. Depreciation expense was 11 percent of plant and equipment (gross) at the beginning of the year. Interest expense for the notes payable was 9 percent, while the interest rate on the bonds payable was 15 percent. This interest expense is based on December 31, 2012 balances. The tax rate averaged 35 percent. $2,800 in preferred stock dividends were paid and $8, 750 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 9 percent. A new machine was purchased on December 31 , 2013, at a cost of $43,000. Accounts payable increased by 25 percent. Notes payable increased by $6,800 and bonds payable decreased by $14,000, 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 Sales Cost of goods sold Gross profit Sellinq and administrative expense Depreciation expense Operating profit Interest expense Earnings before taxes Taxes O $ 260 ooo O 143 ooo O $ 117 ooo O 26,000 28,380 $ 62 620 0 11 220 0 $ 51 400 0 17 O