Question: Comparative balance sheets for 2013 and 2012 a statement of

Comparative balance sheets for 2013 and 2012, a statement of income for 2013, and additional information from the accounting records of Red, Inc., are provided below.

Additional information from the accounting records:
a. During 2013, $230 million of equipment was purchased to replace $180 million of equipment (95% depreciated) sold at book value.
b. In order to maintain the usual policy of paying cash dividends of $50 million, it was necessary for Red to borrow $50 million from its bank.

Prepare the statement of cash flows of Red, Inc., for the year ended December 31, 2013. Present cash flows from operating activities by the direct method. (You may omit the schedule to reconcile net income with cash flows from operatingactivities.)
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  • CreatedDecember 23, 2013
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