188 6 355 RED, INC. Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash $ 29 $ 114 Accounts receivable 137 Prepaid insurance 14 Inventory 252 180 Buildings and equipment 453 Less: Accumulated depreciation (124) (245) $ 812 $ 547 Liabilities Accounts payable $ 95 $ 110 Accrued liabilities 13 Notes payable Bonds payable 162 shareholders' Equity Common stock 405 405 Retained earnings 112 $ 812 $ 547 25 12 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,030 Expenses Cost of goods sold $1,430 Depreciation expense 41 Operating expenses 434 1,905 REU, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,030 Expenses Cost of goods sold $1,430 Depreciation expense Operating expenses 434 1.905 Net income $ 125 Additional information from the accounting records: a. During 2021, $278 million of equipment was purchased to replace $180 million of equipment (90% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $25 million. It was necessary for Red to borrow $25 million from its bank Required: Prepare the statement of cash flows for Red, Inc., using the indirect method to report operating activities (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (.e., 10,000,000 should be entered as 10).) RED, INC. Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: RED, INC. Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Adjustments for noncash effects: Changes in operating assets and liabilities: Net cash flows from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: Net cash flows from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31