Comparative balance sheets for 2021 and 2020, a statement of income for 2021 andadditional information from the accounting records of Red Inc are provided below.RED INC.Comparative Balance SheetsDecember 31,2021 and 2020 ($ inmillions)202120209 AssetsO Cash44.1164.61 Accounts receivable2 Prepaid Insurance3 Inventory14 Buildings and equipment143945.42.429817243637015 Less:16 Accumulated depreciation-144-2591718 Liabilities19 Accounts payable20 Accrued Liabilities21 Notes payable22 Bonds payable23 Shareholders' Equity95106.58.515.510013024 Common Stock25 Retained earningsSheet2400400492214 4Sheet1Sheet3 H.2 Bonds payable3 Shareholders' Equity1304 Common Stock5 Retained earnings4004004922782.55447.RED INC.Statement oflncomeFor the year ended December 31,2021 ($ in millions)1 Revenues2 Sales revenue2,5003 Expenses34 Cost of goods sold35 Depreciation expense36 Operating expense1,825564922,37337 Net Income1278839 Additional information from the accounting records:40 a.) During 2021, $246.0 million of equipnent was purchased to replace $180.041million 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 million43it was necessary forRed to borrow $100.0 million from its bank4445 PREPARET-ACCOUNTS46

Preparing of T accounts for the year 2021 : 1. Cash account ($ in millions) Particulars Amount…

Bonds payable Shareholders' Equity 130 0. Common Stock 400 400 Retained earnings 49 22 782.5 544 RED INC. Statement oflncome For the year ended December 31,2021 ($ in millions) Revenues Sales revenue 2,500 Expenses Cost of goods sold Depreciation expense Operating expense 1,825 56 492 2,373 Net Income 127 Additional information from the accounting records: a.) During 2021, $246.0 million of equipnent was purchased to replace $180.0 million of equipment (95.0% depreciated) sold at book value. b.) In order to maintain the usual policy of paying eash dividends of $100.0 million it was necessary forRed to borrow $100.0 million from its bank PREPARE T-ACCOUNTS

Bonds payable Shareholders' Equity 130 0. Common Stock 400 400 Retained earnings 49 22 782.5 544 RED INC. Statement oflncome For the year ended December 31,2021 ($ in millions) Revenues Sales revenue 2,500 Expenses Cost of goods sold Depreciation expense Operating expense 1,825 56 492 2,373 Net Income 127 Additional information from the accounting records: a.) During 2021, $246.0 million of equipnent was purchased to replace $180.0 million of equipment (95.0% depreciated) sold at book value. b.) In order to maintain the usual policy of paying eash dividends of $100.0 million it was necessary forRed to borrow $100.0 million from its bank PREPARE T-ACCOUNTS

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1
The information on the following page was obtained from the records of Breanna Incorporated: $ 10, 200 50,800 128,000 9,500 64,500 Accounts receivable Accumulated depreciation Cost of goods sold Income tax expense Cash Net sales Equipment Selling, general, and administrative expenses Common stock (8,200 shares) Accounts payable Retained earnings, 1/1/22 Interest expense Merchandise inventory Long-term debt Dividends declared and paid during 2022 Except as otherwise indicated, assume that all balance sheet items reflect account balances at December 31, 2022, and that all income statement items reflect activities that occurred during the year ended December 31, 2022. There were no changes in paid-in capital during the year. Required: a. Prepare an income statement and statement of changes in stockholders' equity for the year ended December 31, 2022, and a balance sheet at December 31, 2022, for Breanna Incorporated. Based on the financial statements that you have prepared for part a,…
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BALANCE SHEET AT END OF YEAR (Figures in $ millions) Assets 2021 2022 Liabilities and Shareholders' Equity 2021 2022 Current assets $ 102 $ 200 Current liabilities $ 74 $ 96 Net fixed assets 920 1,020 Long-term debt 660 870 INCOME STATEMENT, 2022 (Figures in $ millions) Revenue $ 2,010 Cost of goods sold 1,090 Depreciation 410 Interest expense 252 g. Net fixed assets increased from $920 million to $1,020 million during 2022. What must have been South Sea’s gross investment in fixed assets during 2022?........... (M1)
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