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Required information Exercise 21-32 Statement of cash flows;T-account method [LO21-8] Appendix B [The following information applies to the questions displayed below.) Part 1 of 2 Comparative balance sheets for 2018 and 2017, a statement of income for 2018, and additional information from the accounting records of Red, Inc., are provided below. points eBook Hint RED, INC. Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) 2018 2017 Assets Cash $ 21.8 $ 153.3 Accounts receivable 177.0 121.0 Prepaid insurance - 7.2 5.2 Inventory 300.0 160.0 Buildings and equipment 434.0 354.0 Less: Accumulated (102.0) (248.0) depreciation $ 838.0 $ 545.5 Liabilities Accounts payable $ 77.0 $ 95.5 Accrued expenses payable 15.0 21.0 Notes payable 100.0 Bonds payable 185.0 0.0 Shareholders' Equity Common stock 400.0 400.0 Retained earnings 61.0 29.0 $ 838.0 $ 545.5 Print 0.0 References RED, INC. Statement of Income For Year Ended December 31, 2018 ($ in millions) Revenues Sales revenue $3,200.0 Expenses Cost of goods sold $2,304.0 Depreciation expense 25.0 Operating expenses 739.0 3,068.0 Net income $ 132.0 Additional information from the accounting records:

Answer 1

Credit Accounts Receivable Date Debit Credit Beg Bal 121 Sales 3200 Receipt Closing Balc/ Prepaid Insurance Date Debit Beg Bal Add: Accrued insurand Closing Balc/ 33213321 End bal End bal Inventory Debit Credit 160 Date Beg Bal Purchase B/f COGS Closing Bal c/f 2444 Building and equipments Date Debit Credit Beg Bal 354 Sold 1801 Addition 260 Closing Bal c/ 434 614 614 2304 300 2604 2604 End bal 300 End bal 434 Notes Payable Debit Credit Accrued expenses payable Date Debit Credit Beg Bal Operating exp Transfer to Prepaid insurance 747 Date Beg Bal Issuance paid Closing Balc/f End bal End bal 100

Cost of goods sold Debit Credit Sales Debit Credit Bes Bal Bear Date Bent Bal Trade Receivable Inventory 2304 3200 lerto Not income Transfer to Net incel Transfer to Net 3200 ba End bal Operating expenses Date Debit Credit Beg Bal Current year Date IDebit Credit Beg B Add Transfer from Net inco 25 Net Income income summary Date Debit Credit Sales COGS 2300 Depreciation Operating expenses Dividend 100 Transfer to retainede End bal 3200 Transfer to Net income End bal End bal