TO question #43 For December 31 20x1, the balance sheet of Baxter Corporation was as follows $ 17.000 25.000 55.000 Current Assets Cash Accounts receivable Inventory Prepaid expenses Fixed Assets Gross plant and equipment Less Accumulated depreciation Liabilities 15.000 Accounts payable 20.000 Notes payable 30.000 Bonds payable 12.500 Stockholders' Equity 255.000 Preferred stock (51000) Common stock Pald in Capital 204.000 Retained earnings 281.500 Total liabilities and stockholders equity $ 25.000 50.000 30.000 69.500 $ Net plant and equipment Total assets S 5 281500 Sales for 20x2 were 5245.000, and the cost of goods sold was 60 percent of sales Selling and administrative expense was $24500 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, 20X1 balances The tax rate averaged 20 percent $2.500 in preferred stock dividends were paid, and $5,500 in dividends were paid to common stockholders. There were 10.000 shares of common stock outstanding During 20x2, the cash balance and prepaid expenses balonces were unchanged. Accounts receivable and inventory increasel by 10 percent. A new machine was purchased on December 31, 20X2. at a cost of $40,000 Accounts payable increased by 20 percent. Notes payable increased by 56,500 and bonds payable decreased by 512500both 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 20x2. (Round EPS answer to 2 decimal places.)