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Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting records of Red, Incorporated, are
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) Assets Cash Accounts receivable Prepaid insurance Inventory Buildings and equipment Less: Accumulated depreciation Liabilities Accrued liabilities Accounts payable Notes payable Bonds payable Shareholders' Equity Common stock Retained earnings , 2024 2023 $ 25 $ 112 180 8 287 402 (120) $ 782 $ 535 $ 88 $ 102 7 51 161 401 Revenues RED, INCORPORATED Statement of Income For Year Ended December 31, 2024 ($ in millions) Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net income 74 $ 782 $ 535 $ 2,010 $ 1,414 41 449 1,904 $ 106 Additional information from the accounting records: a. During 2024, $231 million of equipment was purchased to replace $180 million of equipment (90% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $51 million, it was necessary for Red to borrow $51 million from its bank. Required: Prepare the statement of cash flows of Red, Incorporated, for the year ended December 31, 2024, using the direct method to report operating activities. Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minus sign. RED, INCORPORATED Statement of Cash Flows For year ended December 31, 2024 ($ in millions) Cash flows from operating activities: Cash inflows: Cash outflows: Net cash flows from operating activities $ 0
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