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Required information [The following information applies to the questions displayed below.] 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 Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net income $ 54.0 166.0 5.0 $ 1,155.0 30.0 420.0 260.0 370.0 (109.0) $746.0 $86.0 5.0 30.0 200.0 RED, INCORPORATED Statement of Income For Year Ended December 31, 2024 ($ in millions) 400.0 25.0 $746.0 $1,650.0 1,605.0 $45.0 2023 $123.0 130.0 2.0 160.0 330.0 (231.0) $514.0 $95.0 9.0 0.0 0.0 400.0 10.0 $514.0

Required information [The following information applies to the questions displayed below.] 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 Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net income $ 54.0 166.0 5.0 $ 1,155.0 30.0 420.0 260.0 370.0 (109.0) $746.0 $86.0 5.0 30.0 200.0 RED, INCORPORATED Statement of Income For Year Ended December 31, 2024 ($ in millions) 400.0 25.0 $746.0 $1,650.0 1,605.0 $45.0 2023 $123.0 130.0 2.0 160.0 330.0 (231.0) $514.0 $95.0 9.0 0.0 0.0 400.0 10.0 $514.0

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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Required information [The following information applies to the questions displayed below.] 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 Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net income $ 54.0 166.0 $ 1,155.0 30.0 420.0 5.0 260.0 370.0 (109.0) $ 746.0 $ 86.0 5.0 30.0 200.0 RED, INCORPORATED Statement of Income For Year Ended December 31, 2024 ($ in millions) 400.0 25.0 $ 746.0 $ 1,650.0 1,605.0 $ 45.0 Additional information from the accounting records: 2023 $123.0 130.0 2.0 160.0 330.0 (231.0) $ 514.0 $95.0 9.0 0.0 0.0 400.0 10.0 $514.0
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Comparative balance sheets for 2024 and 2023, a statement of income for 2024, and additional information from the accounting records of Red, Incorporated, are provided below: Assets Cash RED, INCORPORATED Comparative Balance Sheets December 31, 2024 and 2023 ($ 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 Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net income $ 54.0 166.0 $ 1,155.0 30.0 420.0 5.0 260.0 370.0 (109.0) $ 746.0 $ 86.0 5.0 30.0 200.0 RED, INCORPORATED Statement of Income For Year Ended December 31, 2024 ($ in millions) 400.0 25.0 $ 746.0 $ 1,650.0 1,605.0 $ 45.0 Additional information from the accounting records: 2023 $123.0 130.0 2.0 160.0 330.0 (231.0) $ 514.0 $95.0 9.0 0.0 0.0 400.0 10.0 $514.0
Additional information from the accounting records: a. During 2024, $200.0 million of equipment was purchased to replace $160.0 million of equipment (95.0% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $30.0 million, it was necessary for Red to borrow $30.0 million from its bank. Required: Prepare the statement of cash flows (direct method) for Red, Incorporated. Use the T-account method to assist in your analysis. Note: Cash outflows should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). RED, INCORPORATED Statement of Cash Flows For year ended December 31, 2024 ($ in millions) Cash flows from operating activities: Cash inflows: From customers Cash outflows: Net cash flows from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: 45.0 $ 45.0 0.0
Transcribed Image Text:Additional information from the accounting records: a. During 2024, $200.0 million of equipment was purchased to replace $160.0 million of equipment (95.0% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $30.0 million, it was necessary for Red to borrow $30.0 million from its bank. Required: Prepare the statement of cash flows (direct method) for Red, Incorporated. Use the T-account method to assist in your analysis. Note: Cash outflows should be indicated with a minus sign. Enter your answers in millions rounded to 1 decimal place (i.e., 5,500,000 should be entered as 5.5). RED, INCORPORATED Statement of Cash Flows For year ended December 31, 2024 ($ in millions) Cash flows from operating activities: Cash inflows: From customers Cash outflows: Net cash flows from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: 45.0 $ 45.0 0.0
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