Comparative balance sheets for 2021 and 2020, a statement of income for 2021, and additional information...

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Comparative balance sheets for 2021 and 2020, a statement of income for 2021, and additional information from the accounting records of Red, Inc., are provided below. RED, INC. Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash $ 36 $ 142 Accounts receivable 209 144 Prepaid insurance Inventory Buildings and equipment Less: Accumulated depreciation 12 8 260 187 424 362 (131) $ 810 (252) $ 591 Liabilities Accounts payable Accrued liabilities $ 124 99 11 14 Notes payable Bonds payable Shareholders' Equity 62 147 Common stock 412 412 Retained earnings 79 41 $ 810 $ 591 %24 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,200 Expenses Cost of goods sold Depreciation expense Operating expenses $1,528 47 525 2,100 Net income 100 Additional information from the accounting records: a. During 2021, $272 million of equipment was purchased to replace $210 million of equipment (80% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $62 million, it was necessary for Red to borrow $62 million from its bank. Required: Prepare the statement of cash flows for Red, Inc., using the indirect method to report operating activities. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Required: Prepare the statement of cash flows for Red, Inc., using the indirect method to report operating activities. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) RED, INC. Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Adjustments for noncash effects: Changes in operating assets and liabilities: Net cash flows from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31 Comparative balance sheets for 2021 and 2020, a statement of income for 2021, and additional information from the accounting records of Red, Inc., are provided below. RED, INC. Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash $ 36 $ 142 Accounts receivable 209 144 Prepaid insurance Inventory Buildings and equipment Less: Accumulated depreciation 12 8 260 187 424 362 (131) $ 810 (252) $ 591 Liabilities Accounts payable Accrued liabilities $ 124 99 11 14 Notes payable Bonds payable Shareholders' Equity 62 147 Common stock 412 412 Retained earnings 79 41 $ 810 $ 591 %24 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,200 Expenses Cost of goods sold Depreciation expense Operating expenses $1,528 47 525 2,100 Net income 100 Additional information from the accounting records: a. During 2021, $272 million of equipment was purchased to replace $210 million of equipment (80% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $62 million, it was necessary for Red to borrow $62 million from its bank. Required: Prepare the statement of cash flows for Red, Inc., using the indirect method to report operating activities. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Required: Prepare the statement of cash flows for Red, Inc., using the indirect method to report operating activities. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) RED, INC. Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Adjustments for noncash effects: Changes in operating assets and liabilities: Net cash flows from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31

Answer rating: 100% (QA)

Answer RED INC Statement of cash flows For the year ended 31 December2... View the full answer