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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Debt to Equity Total Debt Ratio Times Interest Earned
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)
Corporation XYZ Income Satement For the year that ends in December 31, 2022 Sales $ 660,000 Cost of goods sold $ (450,000) Gross income $ 210,000 Operating expenses (see note) $ (144,000) Interest expense $ (5,300) Unrealized loss on stock investments $ (500) Profit from sale of equipment $ 1,000 $ (148,800) Income before taxes $ 61,200 Tax expenses $ (18,360) NET INCOME $ 42,840 Partial information of the Comparative Statement of Financial Position (Excluding cash, all current asset accounts and current debts of the company are summarized here) 31/12/22 31/12/21 Difference Accounts Receivable $ 63,000 $ 72,000 $ Allowance for uncollectable accounts $ 1,000 $ 700 $ Inventory $ 114,000 $ 90,000 $ Accounts Payable $ 24,000 $ 42,000 $ Interest Payable $ 2,500 $ 1,000 $ Taxes payable $ 5,200 $ 4,000 $ Discount on bonds payable $ 2,000 $ 2,300 $ Other information 1. During the year, the corporation write-off $200 from the uncollectable accounts During the year, there we no emissions or…
Accounts Payable$ 46,000 Accounts Receivable23, 800Cash (balance on January 1, 2021)90, 400Cash ( balance on December 31, 2021)78,000Common Stock152, 500 Dividends0Equipment137, 700Income Tax Expense10, 200Interest Expense 29, 600Inventory 17, 300Notes Payable25,000Office Expense 14, 400Prepaid Rent7, 100 Retained Earnings (beginning)6, 800Salaries and Wages Expense35, 800Service Revenue139,800 Utilities Expense25, 200Salaries and Wages Payable9, 000 Other cash flow information: Cash from issuing common stock$ 22,000Cash paid to reacquire common stock24, 500Cash paid for income taxes11, 100Cash paid to purchase long-term assets53, 400Cash paid to suppliers and employees84, 400Cash received from customers139,000 Prepare a statement of retained earnings for 2021.
ine following intormation pertains tO Alpha Computing at the ena of 2021: Assets $957,500 $452,500 $270,000 $330,000 Liabilities Net Income Common Stock Alpha Computing's Retained Earnings account had a zero balance at the beginning of 2021. What amount of dividends did the company declare 2021? Multiple Choice $96,000 $97,000 $98,000 $95.000