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 NICs accounting records is provided also.

NATIONAL INTERCABLE COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions)
	2018				2017
Assets
Cash	$	154			$	135
Accounts receivable		404				395
Less: Allowance for uncollectible accounts		(8	)			(6	)
Prepaid insurance		8				13
Inventory		384				375
Long-term investment		70				115
Land		260				260
Buildings and equipment		390				360
Less: Accumulated depreciation		(155	)			(125	)
Trademark		18				20
	$	1,525			$	1,542
Liabilities
Accounts payable	$	51			$	70
Salaries payable		4				7
Deferred income tax liability		19				16
Lease liability		97				0
Bonds payable		155				325
Less: Discount on bonds		(31	)			(36	)
Shareholders' Equity
Common stock		390				360
Paid-in capitalexcess of par		140				130
Preferred stock		60				0
Retained earnings		640				670
	$	1,525			$	1,542

NATIONAL INTERCABLE COMPANY Income Statement For Year Ended December 31, 2018 ($ in millions)
Revenues
Sales revenue	$	550
Investment revenue		17
Gain on sale of investments		5		$	572
Expenses
Cost of goods sold		250
Salaries expense		75
Depreciation expense		50
Trademark amortization expense		2
Bad debt expense		6
Insurance expense		40
Bond interest expense		55
Loss on building fire		54			532
Income before tax					40
Income tax expense					35
Net income				$	5

Additional information from the accounting records:

1. Investment revenue includes National Intercable Company's $5 million share of the net income of Central Fiber Optics Corporation, an equity method investee.
2. A long-term investment in bonds, originally purchased for $50 million, was sold for $55 million.
3. Pretax accounting income exceeded taxable income causing the deferred income tax liability to increase by $3 million.
4. 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.
5. 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.
6. $170 million of bonds were retired at maturity.
7. $30 million par value of common stock was sold for $40 million, and $60 million of preferred stock was sold at par.
8. 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.)

NATIONAL INTERCABLE COMPANY Statement of Cash Flows For year ended December 31, 2018 ($ in millions) Cash inflows: Cash outflows: Noncash investing and financing activities