Question
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 Common stock Shareholders' Equity Retained earnings 2021 2020 $ 39 $ 95 228 147 10 5 240 201 430 375 (134) (255) $ 813 $ 568 $ 102 $ 130 9 18 65 0 169 0 415 415 53 5 $ 813 $ 568 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 $2,150 $1,445 32 560 2,037 $ 113 Additional information from the accounting records: a. During 2021, $235 million of equipment was purchased to replace $180 million of equipment (85% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $65 million, it was necessary for Red to borrow $65 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).) RED, INC. Statement of Cash Flows For year ended December 31, 2021 (5 in millions) Cash fure from nneration artiuise
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