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 $ 39.8 $ 209.3 Accounts receivable 159.0 107.0 Prepaid insurance 12.2 6.2 Inventory 248.0 116.0 Buildings and equipment 457.0 385.0 Less: Accumulated depreciation (192.0) (270.0) $ 724.0 $ 553.5 Liabilities Accounts payable $ 98.0 $ 112.5 Accrued liabilities 11.0 16.0 Notes payable 100.0 Bonds payable 80.0 0.0 Shareholders' Equity Common stock 400.0 400.0 Retained earnings 35.0 25.0 $ 724.0 $ 553.5 0.0 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,800.0 Expenses Cost of goods sold $2,100.0 Depreciation expense 55.0 Operating expenses 535.0 2,690.0 Net income $ 110.0 Additional information from the accounting records. a. During 2021, $212.0 million of equipment was purchased to replace $140.0 million of equipment (95.0% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $100.0 million, it was necessary for Red to borrow $100.0 million from its bank. X Answer is not complete. Accounts Receivable Beg. Bal 107.0 Beg. Bal For expenses Prepaid Insurance 6.2 6.0 End. Bal 107.0 End. Bal 12.2. Inventory 116.0 Buildings and Equipment 385.0 Beg Bal Beg. Bal End. Bal 116.0 End. Bal 385.0 Accounts Payable Beg. Bal Sale of equipment Accumulated Depreciation 270.0 133.0 55.0 Depreciation expense Beg. Bal For expenses 112.5 2.232.0 X From customers x 2,246.5 End. Bal 192.0 End. Bal 98.0 Accrued Liabilities Notes Payable Beg Bal 16.0 Beg Bal 0.0 For expenses 5.0 100.0 Issuance of notes End. Bal 11.0 End. Bal 100.0 Sales Bonds Payable 0.0 Beg. Bal Beg. Bal 0.0 80.0 Issuance of bonds 2,800.0 From customers End. Bal 80.0 End. Bal 2,800.0 Cost of Goods Sold Beg. Bal To suppliers Beg Bal Depreciation expense Depreciation Expense 0.0 55.0 2,100.0 End. Bal 2,100.0 End. Bal 55.0 Operating Expenses Net Income (Income Summary) Beg. Bal Beg. Bal Net Income For expenses 535.0 2,800.0 X From customers End. Bal 535.0 End. Bal 2,800.0 Common Stock Retained Earnings 25.0 Beg. Bal 400.0 Beg. Bal Payment of dividends 100.0 110.0 Net income End. Bal 35.0 End. Bal 400.0