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Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting records of Red, Incorporated, are provided below Assets Cash RED, INCORPORATED Comparative Balance Sheets December 31, 2024 and 2023 ($ in millions) 2024 Accounts receivable Prepaid insurance Inventory Buildings and equipment Less: Accumulated depreciation Liabilities Accounts payable Accrued liabilities Notes payable Bonds payable Shareholders Equity Common stock Retained earnings RED, INCORPORATED Statement of Income For Year Ended December 31, 2024 (5 in millions) Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net Incone $ 1,528 47 525 5.36 209 12 260 424 (131) $ 810 $.99 11 62 147 412 79 $ 810 $ 2,200 2,100 $ 100 2023 $ 142 144 8 187 362 (252) $591 $ 124 14 0 0 412 41 $ 591

Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting records of Red, Incorporated, are provided below Assets Cash RED, INCORPORATED Comparative Balance Sheets December 31, 2024 and 2023 ($ in millions) 2024 Accounts receivable Prepaid insurance Inventory Buildings and equipment Less: Accumulated depreciation Liabilities Accounts payable Accrued liabilities Notes payable Bonds payable Shareholders Equity Common stock Retained earnings RED, INCORPORATED Statement of Income For Year Ended December 31, 2024 (5 in millions) Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net Incone $ 1,528 47 525 5.36 209 12 260 424 (131) $ 810 $.99 11 62 147 412 79 $ 810 $ 2,200 2,100 $ 100 2023 $ 142 144 8 187 362 (252) $591 $ 124 14 0 0 412 41 $ 591

FINANCIAL ACCOUNTING
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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Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting records of Red, Incorporated, are provided below Assets Cash RED, INCORPORATED Comparative Balance Sheets December 31, 2024 and 2023 ($ in millions) 2024 Accounts receivable Prepaid insurance Inventory Buildings and equipment Less: Accumulated depreciation Liabilities. Accounts payable Accrued liabilities Notes payable Bonds payable Shareholders Equity Common stock Retained earnings RED, INCORPORATED Statement of Income For Year Ended December 31, 2024 (5 in millions) Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net Income $1,528 47 525 5.36 209 12 260 424 (131) $ 810 $.99 11 62 147 412 29 810 $ 2,200 2,100 $100 2023 $142 144 8 187 362 (252) $591 $124 14 0 0 412 41 $591
Transcribed Image Text:Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting records of Red, Incorporated, are provided below Assets Cash RED, INCORPORATED Comparative Balance Sheets December 31, 2024 and 2023 ($ in millions) 2024 Accounts receivable Prepaid insurance Inventory Buildings and equipment Less: Accumulated depreciation Liabilities. Accounts payable Accrued liabilities Notes payable Bonds payable Shareholders Equity Common stock Retained earnings RED, INCORPORATED Statement of Income For Year Ended December 31, 2024 (5 in millions) Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net Income $1,528 47 525 5.36 209 12 260 424 (131) $ 810 $.99 11 62 147 412 29 810 $ 2,200 2,100 $100 2023 $142 144 8 187 362 (252) $591 $124 14 0 0 412 41 $591
Additional Information from the accounting records: a. During 2024, $272 million of equipment was purchased to replace $210 million of equipment (80% depreciated) sold at book value b. In order to maintain the usual policy of paying cash dividends of $62 million, it was necessary for Red to borrow $62 million from Its bank Required: Prepare the statement of cash flows of Red, Incorporated, for the year ended December 31, 2024, using the direct method to report operating activities. Note: Enter your answers in millions (l.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minus sign. RED, INCORPORATED Statement of Cash Flows For year ended December 31, 2024 ($ in millions) Cash flows from operating activities Cash inflows From customers Cash outflows To suppliers of goods For operating expenses Net cash flows from operating activities Cash flows from investing activities Sale of equipment Purchase of equipment Net cash flows from investing activities Cash flows from financing activities Issuance of bonds payable Issuance of note payable Payment of dividends Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 311 S 0 0
Transcribed Image Text:Additional Information from the accounting records: a. During 2024, $272 million of equipment was purchased to replace $210 million of equipment (80% depreciated) sold at book value b. In order to maintain the usual policy of paying cash dividends of $62 million, it was necessary for Red to borrow $62 million from Its bank Required: Prepare the statement of cash flows of Red, Incorporated, for the year ended December 31, 2024, using the direct method to report operating activities. Note: Enter your answers in millions (l.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minus sign. RED, INCORPORATED Statement of Cash Flows For year ended December 31, 2024 ($ in millions) Cash flows from operating activities Cash inflows From customers Cash outflows To suppliers of goods For operating expenses Net cash flows from operating activities Cash flows from investing activities Sale of equipment Purchase of equipment Net cash flows from investing activities Cash flows from financing activities Issuance of bonds payable Issuance of note payable Payment of dividends Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 311 S 0 0
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