2 The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for National Intercable Company. Additional information from NIC's accounting records is provided also. 6.66 points 2017 $ Skipped 135 395 (6) Ask 13 Print References NATIONAL INTERCABLE COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) 2018 Assets Cash $ 154 Accounts receivable 404 Less: Allowance for uncollectible (8) accounts Prepaid insurance Inventory 384 Long-term investment 70 Land 260 Buildings and equipment 390 Less: Accumulated depreciation (155) Trademark $1,525 Liabilities Accounts payable $ 51 Salaries payable Deferred income tax liability 19 Lease liability 97 Bonds payable 155 Less: Discount on bonds (31) Shareholders' Equity Common stock 390 Paid-in capital-excess of par 140 Preferred stock 60 Retained earnings 640 $1,525 375 115 260 360 (125) 20 $1,542 18 $ 70 16 325 (36) 360 130 670 $1,542 $ 550 5 $ 572 6.66 points 250 NATIONAL INTERCABLE COMPANY Income Statement For Year Ended December 31, 2018 ($ in millions) Revenues Sales revenue Investment revenue Gain on sale of investments Expenses Cost of goods sold Salaries expense Depreciation expense Trademark amortization expense Bad debt expense Insurance expense Bond interest expense Loss on building fire Income before tax Income tax expense Net income Skipped Ask Print 54 532 40 References $ 5 Additional Information from the accounting records: a. Investment revenue includes National Intercable Company's $5 million share of the net income of Central Fiber Optics Corporation, an equity method investee. b. A long-term investment in bonds, originally purchased for $50 million, was sold for $55 million. c. Pretax accounting income exceeded taxable income causing the deferred income tax liability to increase by $3 million. d. A building that originally cost $80 million, and which was one-fourth depreciated, was destroyed by fire. Some undamaged parts were sold for $6 million. e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $110 million. Annual lease payments of $13 million are paid at Jan. 1 of each year starting in 2018. f. $170 million of bonds were retired at maturity. g. $30 million par value of common stock was sold for $40 million, and $60 million of preferred stock was sold at par. h. Shareholders were paid cash dividends of $35 million. Required: 2. Prepare the statement of cash flows. Present cash flows from operating activities by the direct method. (Enter your answers in millions (i.e., 10,000,000 should be entered as 10.). Amounts to be deducted should be indicated with a minus sign.) 6.66 points NATIONAL INTERCABLE COMPANY Statement of Cash Flows For year ended December 31, 2018 ($ in millions) Skipped Cash inflows: Ask Print References Cash outflows: 6.66 points Skipped Ask Print References Noncash investing and financing activities