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 12 260 187 424 362 (131) $ 810 (252) $ 591 Liabilities Accounts payable Accrued liabilities 99 $ 124 11 14 Notes payable Bonds payable Shareholders Equity 62 147 Common stock 412 412 Retained earnings 79 41 $ 810 $ 591 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 $4 100 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 $62 million from its bank, Required: Prepare the statement of cash flows of Red, Inc., using the direct method to report operating activities. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.) RED, INC. Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Cash inflows: Cash outflows: Net cash flows from operating activities $ Cash flows from investing activities: 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 12 260 187 424 362 (131) $ 810 (252) $ 591 Liabilities Accounts payable Accrued liabilities 99 $ 124 11 14 Notes payable Bonds payable Shareholders Equity 62 147 Common stock 412 412 Retained earnings 79 41 $ 810 $ 591 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 $4 100 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 $62 million from its bank, Required: Prepare the statement of cash flows of Red, Inc., using the direct method to report operating activities. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.) RED, INC. Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Cash inflows: Cash outflows: Net cash flows from operating activities $ Cash flows from investing activities: 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 $
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Answer RED INC Statement of cash flows For the year ended 31 Decembe... View the full answer
Related Book For
Intermediate Accounting
ISBN: 978-1260481952
10th edition
Authors: J. David Spiceland, James Sepe , Mark Nelson, Wayne Thomas
Posted Date:
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