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Help with this question please follow the guidelines as shown. Required information [The following information applies to the questions displayed below.) Comparative balance sheets for
Help with this question please follow the guidelines as shown.
Required information [The following information applies to the questions displayed below.) 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) 2021 2020 Assets Cash $ 24 $ 110 Accounts receivable 178 132 Prepaid insurance 7 3 Inventory 285 175 Buildings and equipment 400 350 Less: Accumulated depreciation (119) (240) $ 775 $ 530 Liabilities Accounts payable $ 87 $ 100 Accrued liabilities 6 11 Notes payable 50 Bonds payable 160 Shareholders' Equity Common stock 400 400 Retained earnings 72 19 $ 775 $ 530 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,000 Expenses Cost of goods sold $1,400 Depreciation expense 50 Operating expenses 447 1,897 Net income $ 103 Additional information from the accounting records: a. During 2021, $230 million of equipment was purchased to replace $180 million of equipment (95% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $50 million, it was necessary for Red to borrow $50 million from its bank. Required: Prepare the T-account for Red, Inc. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) Cash (Statement of Cash Flows) Beg. Bal. Operating Activities: Investing Activities: Financing Activities: End. Bal. Accounts Receivable Beg. Bal End. Bal Inventory Beg. Bal End. Bal Accumulated Depreciation Beg. Bal End. Bal Prepaid Insurance Beg. Bal End. Bal Buildings and Equipment Beg. Bal End. Bal Accounts Payable Beg. Bal End. Bal Accrued Liabilities Beg. Bal End. Bal Bonds Payable Beg. Bal End. Bal Cost of Goods Sold Beg. Bal End. Bal Notes Payable Beg. Bal End. Bal Sales Beg. Bal End. Bal Depreciation Expense Beg. Bal End. Bal Operating Expenses Beg. Bal End. Bal Retained Earnings Beg. Bal End. Bal Net Income (Income Summary) Beg. Bal End. Bal Common Stock Beg. Bal End. BalStep by Step Solution
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