2 Comparative balance sheets for 2021 and 2020, a statement of income for 2021 and3 additional information from the accounting records of Red Inc are provided below.4.RED INC.9.Comparative Balance SheetsDecember 31,2021 and 2020 ($ inmillions)202120209 Assets10 Cash44.1164.611 Accounts receivable1439412 Prepaid Insurance13 Inventory14 Buildings and equipment5.42.429817243637015 Less:16 Accumulated depreciation-144-2591718 Liabilities95106.519 Accounts payable20 Accrued Liabilities21 Notes payable22 Bonds payable23 Shareholders' Equity8.515.51000.13040040024 Common Stock25 Retained earnings4922144>Sheet1Sheet2Sheet3 2 Bonds payable3 Shareholders' Equity1304 Common Stock5 Retained earnings400400492226782.55442728RED INC.29Statement oflncome30For the year ended December 31,2021 ($ in millions)31 Revenues32 Sales revenue2,50033 Expenses34 Cost of goods sold35 Depreciation expense36 Operating expense1,825564922,37337 Net Income1273839 Additional information from the accounting records:40 a.) During 2021, $246.0 million of equipnent was purchased to replace $180.0million of equipment (95.0% depreciated) sold at book value.42 b.) In order to maintain the usual policy of paying eash dividends of $100.0 million4143it was necessary forRed to borrow $100.0 million from its bank4445 PREPARE CASH FLOW( DIRECT METHOD) AND T- ACCOUNTS46144>4Sheet1Sheet?Sheet?

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 ($ inmillions) 2021 2020 9 Assets 10 Cash 44.1 164.6 11 Accounts receivable 143 94 12 Prepaid Insurance 13 Inventory 14 Buildings and equipment 5.4 2.4 298 172 436 370 15 Less: -144 -259 16 Accumulated depreciation 17 18 Liabilities 95 106.5 19 Accounts payable 8.5 15.5 20 Accrued Liabilities 100 21 Notes payable 22 Bonds payable 130 01 23 Shareholders' Equity 24 Common Stock 400 400 49 22

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 ($ inmillions) 2021 2020 9 Assets 10 Cash 44.1 164.6 11 Accounts receivable 143 94 12 Prepaid Insurance 13 Inventory 14 Buildings and equipment 5.4 2.4 298 172 436 370 15 Less: -144 -259 16 Accumulated depreciation 17 18 Liabilities 95 106.5 19 Accounts payable 8.5 15.5 20 Accrued Liabilities 100 21 Notes payable 22 Bonds payable 130 01 23 Shareholders' Equity 24 Common Stock 400 400 49 22

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter1: Accounting And The Financial Statements

Section: Chapter Questions

Problem 51E: Exercise 1-51 Relationships Among the Financial Statements Zachary Corporations December 31, 2018...

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