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 $ $31$ $ $150$

Accounts receivable $255239$

Prepaid insurance $62$

Inventory $215100$

Buildings and equipment $492357$

Less: Accumulated depreciation $(126)(247)$

$ $873$ $ $601$

Liabilities

Accounts payable $ $85$ $ $114$

Accrued liabilities $59$

Notes payable $320$

Bonds payable $1480$

Shareholders$$ Equity

Common stock $407407$

Retained earnings $19671$

$ $873$ $ $601$

RED, INCORPORATED

Statement of Income

For Year Ended December $31,2024$

$($$ in millions$)$

Revenues

Sales revenue $ $2,200$

Expenses

Cost of goods sold $ $1,500$

Depreciation expense $23$

Operating expenses $5202,043$

Net income $ $157$

Additional information from the accounting records:

During $2024,$ $$315$ million of equipment was purchased to replace $$180$ million of equipment $(80\%$ depreciated$)$ sold at book value.

In order to maintain the usual policy of paying cash dividends of $$32$ million, it was necessary for Red to borrow $$32$ million from its bank.