Question

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.] 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. RED, INC. Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) 2018 2017 Assets Cash $ 20,3 $160.8 Accounts receivable 138.9 9 . Prepaid insurance 7.2 3.2 Inventory 295.0 171.0 Buildings and equipment 429. 365.0 Less: Accumulated depreciation (139.0) (256.0) $ 750.5 $ 534.0 Liabilities Accounts payable $ 94,0 $184.5 Accrued expenses payable 2.5 8.5 Notes payable 18e. Bonds payable 120.0 Shareholders' Equity Common stock 488. 480. Retained earnings 34.0 21.0 $ 750.5 $534.0 0.0 RED, INC. Statement of Income For Year Ended December 31, 2018 ($ in millions) Revenues Sales revenue $2,480. Expenses Cost of goods sold $1,752.0 Depreciation expense 54. Operating expenses 481.2 2,287.6 Net income $ 113.2 Additional information from the accounting records:

Answer 1

Red Inc. ($ in millions)) Statement of Cashflow For the period ending 31.12.2018 Cashflows from Operating Activity Collection from clients (2400 +90-138) 2352 Payments to Suppliers (1752 104.5-94+295-171) -1886.5 Expenses paid (481 +7.2-3.2+8.5-2.5) Cash used for Operating Activity -491 -25.5 Cashflows from Investing Activity Equipment Purchased -24 Equipment Sold ( 180 x 0.05) Cash used for Investing Activity -235 Cashflows from Financing Activity Note Payable issued Bond Payable issued 100 120 Dividends paid -100 Cash generated from Financing Activity 120 Net Decrease in Cash -140.5 Beginning Cash Balance Ending Cash Balance 160.8 20.3