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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 ($ in millions) Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net income $ 1,471 41 540 $43 196 9 302 438 (138) $ 850 $ 106 8 69 154 419 94 $ 850 $ 2,190 2,052 $ 138 2023 $ 138 151 4 194 369 (259) $ 597 $ 138 15 0 0 419 25 $ 597 Additional information from the accounting records: a. During 2024, $249 million of equipment was purchased to replace $180 million of equipment (90% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $69 million, it was necessary for Red to borrow $69 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 (i.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minus sign.

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 ($ in millions) Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net income $ 1,471 41 540 $43 196 9 302 438 (138) $ 850 $ 106 8 69 154 419 94 $ 850 $ 2,190 2,052 $ 138 2023 $ 138 151 4 194 369 (259) $ 597 $ 138 15 0 0 419 25 $ 597 Additional information from the accounting records: a. During 2024, $249 million of equipment was purchased to replace $180 million of equipment (90% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $69 million, it was necessary for Red to borrow $69 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 (i.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minus sign.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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 ($ in millions) Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net income $ 1,471 41 540 $43 196 9 302 438 (138) $ 850 $ 106 8 69 154 419 94 $ 850 $ 2,190 2,052 $ 138 2023 $ 138 151 4 194 369 (259) $ 597 $ 138 15 0 0 419 25 $ 597 Additional information from the accounting records: a. During 2024, $249 million of equipment was purchased to replace $180 million of equipment (90% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $69 million, it was necessary for Red to borrow $69 million from its bank. Required: Prepare the statement of cash flows of Red, Incorporated, for the year ended December 31, 2024, using the direct method to report operating activities. Note: Enter your answers in millions (i.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minus sign.
Transcribed Image Text:Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting records of Red, Incorporated, are provided below: Assets Cash RED, INCORPORATED Comparative Balance Sheets December 31, 2024 and 2023 ($ 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 ($ in millions) Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net income $ 1,471 41 540 $43 196 9 302 438 (138) $ 850 $ 106 8 69 154 419 94 $ 850 $ 2,190 2,052 $ 138 2023 $ 138 151 4 194 369 (259) $ 597 $ 138 15 0 0 419 25 $ 597 Additional information from the accounting records: a. During 2024, $249 million of equipment was purchased to replace $180 million of equipment (90% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $69 million, it was necessary for Red to borrow $69 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 (i.e., 10,000,000 should be entered as 10). Cash outflows should be indicated with a minus sign.
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