For December $31,20$X$1,$ the balance sheet of Baxter Corporation was as follows:

Current Assets Liabilities

Cash $ $25,000$ Accounts payable $ $27,000$

Accounts receivable $30,000$ Notes payable $35,000$

Inventory $40,000$ Bonds payable $65,000$

Prepaid expenses $13,500$

Fixed Assets Stockholders$$ Equity

Plant and equipment $($gross$)$ $ $265,000$ Preferred stock $ $35,000$

Less: Accumulated depreciation $(53,000)$ Common stock $70,000$

Paid in Capital $40,000$

Net plant and equipment $ $212,000$ Retained earnings $48,500\}$

Total liabilities and stockholders$$ equity $ $320,500$

Sales for $20$X$2$ were $$295,000,$ and the cost of goods sold was $60$ percent of sales. Selling and administrative expense was $$29,500.$ 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 $31,20$X$1$ balances. The tax rate averaged $20$ percent.

$$3,500$ in preferred stock dividends were paid, and $$4,950$ in dividends were paid to common stockholders. There were $10,000$ shares of common stock outstanding.

During $20$X$2,$ the cash balance and prepaid expenses balances were unchanged. Accounts receivable and inventory increased by $10$ percent. A new machine was purchased on December $31,20$X$2,$ at a cost of $$50,000.$

Accounts payable increased by $35$ percent. Notes payable increased by $$7,500$ and bonds payable decreased by $$17,500,$ 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 $20$X$2.$

Note: Round EPS answer to $2$ decimal places. Input all your answers as positive values

Prepare a statement of retained earnings for $20$X$2.$

Note: Input all your answers as positive values

Prepare a balance sheet as of December $31,20$X$2.$

Note: Amounts to be deducted should be indicated with parentheses or a minus sign.