Please do not give solution in image format ? a. During 2021, $289 million of equipment was purchased to replace $190 million of equipment (80% depreciated) sold at book value.b. In order to maintain the usual policy of paying cash dividends of $56 million, it was necessary for Red to borrow $56 million from itsbank.Required:Prepare the statement of cash flows of Red, Inc., using the direct method to report operating activities. (Enter your answers in millions(.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 FlowsFor year ended December 31, 2021 (5 in millions)Cash flows from operating activities:Cash inflowsCash outflows:Net cash flows from operating activitiesCash flows from investing activities:Net cash flows from investing activitiesCash flows from financing activities:Issuance of note payableissuance of bonds payablePayment of dividendsNet cash flows from financing activitiesNet increase (decrease) in cashCash balance, January 1Cash balance, December 31S$10000 Comparative balance sheets for 2021 and 2020, a statement of Income for 2021, and additional information from the accountingrecords of Red, Inc., are provided below.RED, INC.Comparative Balance SheetsDecember 31, 2021 and 2020 (s in millions)2821$ 30AssetsCashAccounts receivablePrepaid insuranceInventoryBuildings and equipment.Less: Accumulated depreciationLiabilitiesAccounts payableAccrued liabilitiesNotes payableBonds payableShareholders EquityCommon stockRetained earningsRevenuesSales revenueExpensesCost of goods soldDepreciation expenseOperating expensesNet income$1,4443119813254455(125)RED, INC.Statement of IncomeFor Year Ended December 31, 2021(s in millions)486$ 817$97125616240684$817$2,0801,961$1192020$ 1221389181356(246)$ 560$ 112210040621$ 560

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 (s in millions) 2821 $ 30 198 13 254 455 (125) Assets Cash Accounts receivable Prepaid insurance Inventory Buildings and equipment, Less: Accumulated depreciation. Liabilities Accounts payable Accrued liabilities Notes payable Bonds payable Shareholders Equity Common stock Retained earnings Revenues Sales revenue Expenses Cost of goods sold Depreciation expense. Operating expenses Net income $ 817 RED, INC. Statement of Income For Year Ended December 31, 2021 (s in millions) $1,444 31 486 $97 12 56 162 406 84 $817 $2,080 1,961 $119 2020 $ 122 138 9 181 356 (246) $ 560 $ 112 21 0 0 406 21 $ 560

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 (s in millions) 2821 $ 30 198 13 254 455 (125) Assets Cash Accounts receivable Prepaid insurance Inventory Buildings and equipment, Less: Accumulated depreciation. Liabilities Accounts payable Accrued liabilities Notes payable Bonds payable Shareholders Equity Common stock Retained earnings Revenues Sales revenue Expenses Cost of goods sold Depreciation expense. Operating expenses Net income $ 817 RED, INC. Statement of Income For Year Ended December 31, 2021 (s in millions) $1,444 31 486 $97 12 56 162 406 84 $817 $2,080 1,961 $119 2020 $ 122 138 9 181 356 (246) $ 560 $ 112 21 0 0 406 21 $ 560

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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