User Account

All Pages

In order to maintain the usual policy of paying cash

Assignment Help Accounting Basics
Reference no: EM13569523

Comparative balance sheets for 2013 and 2012, a statement of income for 2013, and additional information from the accounting records of Red, Inc., are provided below.

 

 

RED, INC.
Comparative Balance Sheets
December 31, 2013 and 2012 ($ in millions)

2013 2012
  Assets





  Cash $ 24
$ 110
  Accounts receivable
178

132
  Prepaid insurance
7

3
  Inventory
285

175
  Buildings and equipment
400

350
  Less: Accumulated depreciation
(119 )
(240 )








$ 775
$ 530







  Liabilities





  Accounts payable $ 87
$ 100
  Accrued expenses payable
6

11
  Notes payable
50

0
  Bonds payable
160

0
  Shareholders' Equity





  Common stock
400

400
  Retained earnings
72

19








$ 775
$ 530








 

 

RED, INC.
Statement of Income
For Year Ended December 31, 2013 ($ in millions)
Revenues





  Sales revenue


$ 2,000
  Expenses





  Cost of goods sold $ 1,400



  Depreciation expense
50



  Operating expenses
447

1,897







  Net income


$ 103








 

 

Additional information from the accounting records:

 

a.

During 2013, $230 million of equipment was purchased to replace $180 million of equipment (95% depreciated) sold at book value.

 

b.

In order to maintain the usual policy of paying cash dividends of $50 million, it was necessary for Red to borrow $50 million from its bank.

 

 

Required:

Prepare the statement of cash flows of Red, Inc. using the indirect method to report operating activities.

 

Reference no: EM13569523

Questions Cloud

Merchandise with an invoice price of 2000 was purchased on : merchandise with an invoice price of 2000 was purchased on october 3 terms 115 n60. the company uses the net method to
In september deposits per the bank statement totaled 40100 : the cash records of browler company show the following four situations.nbsp1.the june 30 bank reconciliation indicated
Review the material in the chapters and the folders in the : review the material in the chapters and the folders in the section on drugs and alcohol and sexual deviance to
Pats electronics division sells computers through agents in : pats electronics division sells computers through agents in various cities. agents send orders and down payments to our
In order to maintain the usual policy of paying cash : comparative balance sheets for 2013 and 2012 a statement of income for 2013 and additional information from the
The us government sells 3-month treasury bills microsoft : which of the following is an example of both a capital market and a primary market transaction? no transactions occur
Continue working on the criminal justice program proposal : continue working on the criminal justice program proposal for the problem.write a 1750- to 2100-word proposal that
Seller wishes to sell goods but the goods are subject to an : 1.which warranty cannot be disclaimed?nbspnbspnbspnbspnbspnbspnbspnbspnbspnbspnbsp a.
The records at the end of january 2012 for captain company : the records at the end of january 2012 for captain company showed the following for a particular kind of merchandise

Reviews

Write a Review

Accounting Basics Questions & Answers

  Internet and e-business-working capital management

What effect has the Internet and e-Business had on working capital management? What are the positives and the negatives?

  The study of advanced cost accounting focuses on the

the study of advanced cost accounting focuses on the significance of examining and managing costs activity-based

  Affecting retained earnings

Which of the following will not affect retained earnings?

  Performing accounting and review services

Jones, CPA, entered into a signed contract with Foster Corp. to perform accounting and review services. If Jones repudiates the contract prior to the date performance is due to begin, which of the following is false?

  Character of income-partnership interest

How much income must Dave report for the tax year and what is the character of the income? What is Dave's basis in his partnership interest at the end of the tax year?

  Establish a petty cash fund to help ensure internal control

Carolyn Keene, Inc. decided to establish a petty cash fund to help ensure internal control over its small cash expenditures. The following information is available for the month of April.

  In early july 2011 lifestyle lighting ltd expanded

lifestyle lighting ltd. reported the following on its balance sheet at december 31 2010capital assets at costland

  Are additional costs of plant assets that do not materially

revenue expenditures1. are additional costs of plant assets that do not materially increase the assets life or its

  Problem related to drop in sales

Company sells a single product at $20 per unit. Sales- 100,000, variable costs $800,000, fixed costs $400,000 If a $4 drop in selling price will boost unit sales by 20% the company will experience:

  Daisyworld by providing a variety of rides

Storytime Park competes with DaisyWorld by providing a variety of rides. Storytime sells tickets at $70 per person as a one-day entrance fee. Variable costs are $15 per person, and fixed costs are $371,250 per month.Requirement

  Explain incentives of earnings management

Each literature review must be backed up by 5-10 articles, booksm journals and referenced.

  Schedule of interest revenue and bond discount amortization

Prepare a 3-year schedule of interest revenue and bond discount amortization, applying the effective- interest method. Prepare the journal entry for the interest receipt of December 31, 2011, and the discount amorti- zation under the straight-line..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd