RED, INC. Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash $36.0 $ 135.0 Accounts receivable 162.0 122.0 Prepaid insurance 14.2 7.0 Inventory 272.0 164.0 Buildings and equipment 368.0 320.0 Less: Accumulated depreciation (72.0) (224.0) $780.0 $ 524.0 Liabilities Accounts payable $ 82.0 $ 96.0 Accrued liabilities 8.0 15.0 Notes payable 50.0 0.0 Bonds payable 175.0 0.0 Shareholders' Equity Common stock 400.0 400.0 Retained earnings 65.0 13.0 $780.0 $ 524.0 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $1,880.0 Expenses Cost of goods sold $1,316.0 Depreciation expense 38.0 Operating expenses 424.0 1,778.0 Net income $ 102.0 Additional Information from the accounting records: a. During 2021, $248.0 million of equipment was purchased to replace $200.0 million of equipment (95.0% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $50.0 million, it was necessary for Red to borrow $50.0 million from its bank. Required: Prepare the T-account for Red, Inc. (Enter your answers in millions rounded to 1 decimal pl 5.5).) Answer is complete and correct. Cash (Statement of Cash Flows) 135.0 Beg Bal. Operating Activities: From customers 1,840.0 1,438.0 To suppliers For expenses 438.0 Investing Activities: Sale of equipment 10.0 248.0 Purchase of equipment Financing Activities: Issuance of bonds Issuance of notes 175.0 50.0 Payment of dividends 50.0 End. Bal. 36.0 Answer is not complete. Prepaid Insurance Accounts Receivable 122.0 Beg. Bal Beg. Bal 7.0 1.880.0 X 1,840.0 X 7.0 End. Bal 162.0 End. Bal 14.0 Inventory Beg Bal 164.0 Beg. Bal Buildings and Equipment 320.0 248.0 200.0 1,424.0 X 1,316.0 X End. Bal 272.0 End. Bal 368.0 Accounts Payable Beg Bal Accumulated Depreciation 224.0 190.0 38.0 Beg. Bal 96.0 1,438.0 X 1,424.0 x End. Bal 72.0 End. Bal 82.0 Accrued Liabilities Notes Payable Beg. Bal 15.0 Beg. Bal 0.0 7.0 50.0 End. Bal 8.0 End. Bal 50.0 Bonds Payable Sales Beg Bal 0.0 Beg. Bal 0.0 175.0 1,880.0 End. Bal 175.0 End. Bal 1,880.0 Cost of Goods Sold Depreciation Expense 0.0 Beg. Bal 0.0 Beg. Bal 1,316.0 38.0 End. Bal 1.316.0 End. Bal 38.0 Net Income (Income Summary) Operating Expenses 0.0 Beg. Bal 0.0 Beg. Bal Net Income 424.0 102.0 End. Bal 424.0 End. Bal 102.0 Common Stock Beg. Bal Retained Earnings 13.0 50.0 102.0 Beg. Bal 400.0 End. Bal 65.0 End. Bal 400.0