Incomplete financial statements for Baxter, Inc. follow.

BAXTER, INC.

Income Statement

Year Ended November 30, 2018

Service revenue...............................$225,000

Operating expenses..................................[1]

Income before income tax.....................45,000

Income tax expense..............................9,000

Net income .........................................$ [2]

Instructions
(a) Calculate the missing amounts for [1] to [13]. Note that you may not be able to solve the items in numerical order.
(b) Explain (1) the sequence for preparing the financial statements, and (2) the interrelationships among the income statement, statement of changes in equity, and statement of financial position.

Transcribed Image Text:

BAXTER, INC. Statement of Changes in Equity Year Ended November 30, 2018 Common Shares Retained Earnings Total Equity Balance, December 1, 2017 0 0 0 [51 6 I Issued co mmom shares 250,000o Net income Dividends declared Balance, November 30, 2018$250,000 $[41S71 15.000(15.000 BAXTER, INC. Statement of Financial Position November 30, 2018 Assets Liabilities and Shareholders' Equity $ [10] s [10] 600.000 Cash Accounts receivable 34,000 Accounts payable Land Buildings Equipment Total assets $22,000 Liabilities [8] Bank loan payable 390,000 Total liabilities 218,000 Shareholders' equity s [gl Common shares Retained earnings Total shareholders' equity Total liabilities and shareholders' equity $964,000 12] 113]