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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
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) 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 2021 2020 $ 32 175 $ 153 141 9 5 300 184 418 359 (128) (249) $ 806 $ 593 $ 96 $ 118 8 12 59 e 175 409 409 59 54 $ 806 $ 593 RED, INC. Statement of Income For Year Ended December 31, 2021 (s in millions) Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net income $2,090 $1,361 69 596 2,026 $ 64 Additional information from the accounting records: a. During 2021, $259 million of equipment was purchased to replace $200 million of equipment (95% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $59 million, it was necessary for Red to borrow $59 million from its bank. Required: Prepare the statement of cash flows of Red, Inc., using the direct method to report operating activities. (Enter your answers in millions (ie., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.) RED, INC. Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash Bros from nnerstinn artition
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