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Required Information [The following information applies to the questions displayed below.) Comparative balance sheets for 2021 and 2020, a statement of income for 2021, and additional Information from the accounting records of Red, Inc., are provided below. RED, INC. Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash $ 39.8 $ 209.3 Accounts receivable 159.0 107.0 Prepaid insurance 12.2 6.2 Inventory 248.0 116.0 Buildings and equipment 457.0 385.0 Less: Accumulated depreciation (192.0) (270.0) $ 724.0 $ 553.5 Liabilities Accounts payable $ 98.0 $ 112.5 Accrued liabilities 11.0 16.0 Notes payable 100.0 Bonds payable 80.0 0.0 Shareholders' Equity Common stock 400.0 400.0 Retained earnings 35.0 25.0 $ 724.0 $ 553.5 0.0 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,800.0 Expenses Cost of goods sold $2,100.0 Depreciation expense 55.0 Operating expenses 535.0 2,690.0 Net income $ 110.0 Additional information from the accounting records. a. During 2021, $212.0 million of equipment was purchased to replace $140.0 million of equipment (95.0% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $100.0 million, it was necessary for Red to borrow $100.0 million from its bank. Required: Prepare the T-account for Red, Inc. (Enter your answers in millions rounded to 1 decimal place (1.e., 5,500,000 should be entered as 5.5).) Cash (Statement of Cash Flows) Beg Bal. Operating Activities: Investing Activities: Financing Activities: End. Bal. Accounts Receivable Prepaid Insurance Beg. Bal Beg Bal End. Bal End. Bal Inventory Buildings and Equipment Beg. Bal Beg Bal End. Bal End. Bal Accumulated Depreciation Accounts Payable Beg. Bal Beg. Bal End. Bal End. Bal Accrued Liabilities Notes Payable Beg. Bal Beg. Bal End. Bal End. Bal Bonds Payable Sales Beg. Bal Beg Bal End. Bal End. Bal Cost of Goods Sold Depreciation Expense Beg. Bal Beg. Bal End. Bal End. Bal Operating Expenses Net Income (Income Summary) Beg. Bal Beg Bal Net Income End. Bal End. Bal Retained Earnings Common Stock Beg Bal Beg. Bal End. Bal End. Bal

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