Required information Exercise 21 32 Statement of cash flows T account method LO21 8 Appendix B The following information applies to the questions displayed below Comparative balance sheets for 2018 and 2017, a statement of income for 2018, and additional information from the accounting records of Red, Inc , are provided below RED, INC Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) 2018 Assets Cash $ 36 0 $ 135 0 Accounts receivable 162 0 Prepaid insurance 14 0 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 expenses payable 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, 2018 ($ 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 During 2018, $248 0 million of equipment was purchased to replace $200 0 million of equipment (95 0 depreciated) sold at book value 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 Exercise 21 32 Part 1 Required Prepare the T account for Red, Inc Cash (Statement of Cash Flows) Beg Bal Operating Activities Investing Activities Financing Activities End Bal T Accounts for below Retained Earnings Net Income(Income summary) Prepaid Insurance Accounts receivable Building and Equipment Accounts Payable Notes Payable Sales Bonds Payable Accumulated Depreciation Inventory Accrued Expenses Payable Cost of Goods Sold Depreciation Expense

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Required information Exercise 21-32 Statement of cash flows;T-account method [LO21-8] Appendix B [The following information applies to the questions displayed below.] Comparative balance sheets for

Required information

Exercise 21-32 Statement of cash flows;T-account method [LO21-8] Appendix B

[The following information applies to the questions displayed below.] Comparative balance sheets for 2018 and 2017, a statement of income for 2018, and additional information from the accounting records of Red, Inc., are provided below.

RED, INC. Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions)
	2018
		Assets
		Cash	$	36.0		$	135.0
		Accounts receivable		162.0
		Prepaid insurance		14.0			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 expenses payable		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, 2018
($ 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:

During 2018, $248.0 million of equipment was purchased to replace $200.0 million of equipment (95.0% depreciated) sold at book value.
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.

Exercise 21-32 Part 1

Required: Prepare the T-account for Red, Inc

Cash (Statement of Cash Flows)
Beg. Bal.
Operating Activities:



Investing Activities:


Financing Activities:



End. Bal.


	T-Accounts for below-

Retained Earnings/ Net Income(Income summary)/ Prepaid Insurance/ Accounts receivable/ Building and Equipment/ Accounts Payable Notes Payable/ Sales/ Bonds Payable/ Accumulated Depreciation/ Inventory /Accrued Expenses Payable/ Cost of Goods Sold/Depreciation Expense