a. During 2021, $267 million of equipment was purchased to replace $200 million of equipment (95%...
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a. During 2021, $267 million of equipment was purchased to replace $200 million of equipment (95% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $67 million, it was necessary for Red to borrow $67 million from its bank. Required: Prepare the statement of cash flows of Red, Inc., using the direct method to report operating activities. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.) RED, INC. Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Cash inflows: Cash outflows: Net cash flows from operating activities Cash flows from investing activities: 24 RED, INC. Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash Accounts receivable Prepaid insurance Inventory Buildings and equipment Less: Accumulated depreciation $ 41 $ 165 149 8 192 367 (257) 192 15 319 434 (136) $ 865 $ 624 Liabilities Accounts payable Accrued liabilities Notes payable Bonds payable Shareholders' Equity Common stock Retained earnings $ 104 14 67 178 $ 134 20 417 85 417 53 $ 865 $ 624 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses $2,170 $1,469 69 533 2,071 Net income 99 a. During 2021, $267 million of equipment was purchased to replace $200 million of equipment (95% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $67 million, it was necessary for Red to borrow $67 million from its bank. Required: Prepare the statement of cash flows of Red, Inc., using the direct method to report operating activities. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.) RED, INC. Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Cash inflows: Cash outflows: Net cash flows from operating activities Cash flows from investing activities: 24 RED, INC. Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash Accounts receivable Prepaid insurance Inventory Buildings and equipment Less: Accumulated depreciation $ 41 $ 165 149 8 192 367 (257) 192 15 319 434 (136) $ 865 $ 624 Liabilities Accounts payable Accrued liabilities Notes payable Bonds payable Shareholders' Equity Common stock Retained earnings $ 104 14 67 178 $ 134 20 417 85 417 53 $ 865 $ 624 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses $2,170 $1,469 69 533 2,071 Net income 99
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RED INC STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER2021 in millions Par... View the full answer
Related Book For
Cornerstones of Managerial Accounting
ISBN: 978-1305103962
6th edition
Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Posted Date:
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