Comparative balance sheets for $2024$ and $2023,$ a statement of income for $2024,$ and additional information from the accounting records of Red, Incorporated, are provided below:

RED, INCORPORATED

Comparative Balance Sheets

December $31,2024$ and $2023($$ in millions$)$

$20242023$

Assets

Cash $ $38$ $ $110$

Accounts receivable $215146$

Prepaid insurance $137$

Inventory $280200$

Buildings and equipment $428364$

Less: Accumulated depreciation $(133)(254)$

$ $841$ $ $573$

Liabilities

Accounts payable $ $101$ $ $128$

Accrued liabilities $1217$

Notes payable $640$

Bonds payable $1500$

Shareholders$$ Equity

Common stock $414414$

Retained earnings $10014$

$ $841$ $ $573$

RED, INCORPORATED

Statement of Income

For Year Ended December $31,2024$

$($$ in millions$)$

Revenues

Sales revenue $ $2,140$

Expenses

Cost of goods sold $ $1,447$

Depreciation expense $23$

Operating expenses $5201,990$

Net income $ $150$

Additional information from the accounting records:

During $2024,$ $$244$ million of equipment was purchased to replace $$180$ million of equipment $(80\%$ depreciated$)$ sold at book value.

In order to maintain the usual policy of paying cash dividends of $$64$ million, it was necessary for Red to borrow $$64$ million from its bank.