21-11 (Algo) Prepare a statement of cash flows; direct method [LO21-3, 21-8] The comparative balance sheets for 2021 and 2020 and the income statement for 2021 are given below for Arduous Company. Additional information from Arduous's accounting records is provided also. ARDUOUS COMPANY Comparative Balance Sheets December 31, 2021 and 2020 (in millions) 2021 2020 Assets Canh Accounts receivable Investment revenue receivable Inventory Prepaid insurance Long-term investment Land Buildings and equipment Less Accumulated depreciation Patent Liabilities $ 145 $ 99 20 230 26 22 226 218 241 31 212 143 232 160 430 436 (115) (156) 49 53 $1,437 $1,244 Accounts payable $ 68 $ 101) Salaries payable 26 36 Interest payable (bonda) 28 22 Income tax payable 30 36 Deferred tax liability 47 26 Notes payable 32 0 Lease liability 93 Bonds payable 233 311 Less: Discount on bonds (40) (44) Shareholders' Equity Connon stock 484 428 Paid-in capital-excess of part 131 103 Preferred stock 93 0 Retained earnings 239 225 Retained earnings Less: Treasury stock ARDUOUS COMPANY Income Statement For Year Ended December 31, 2021 (in millions) Revenues and gain Sales revenue Investment revenue Gain on sale of Treasury bills Expenses and loss: Cost of goods sold Salaries expense Depreciation expense Insurance expense Amortization expense Interest expense Loss on sale of equipment Income tax expense Het income 239 225 (27) 0 $1,437 $1,244 $582 32 4 $618 198 91 12 4 25 46 153 Additional information from the accounting records: a. Investment revenue includes Arduous Company's $26 million share of the net income of Demur Company, an equity method investee. b. Treasury bills were sold during 2021 at a gain of $4 million, Arduous Company classifies its investments in Treasury bills as cash equivalents. c. Equipment originally costing $106 million that was one-half depreciated was rendered unusable by a flood. Most major components of the equipment were unharmed and were sold for $18 million. d. Temporary differences between pretax accounting income and taxable income caused the deferred tax liability to increase by $21 million. e. The preferred stock of Tory Corporation was purchased for $43 million as a long-term investment. million. e. The preferred stock of Tory Corporation was purchased for $43 million as a long-term investment. f. Land costing $64 million was acquired by issuing $32 million cash and a 10%, four-year, $32 million note payable to the seller. g. The right to use a building was acquired with a 15-year lease agreement; present value of lease payments, $100 million. Annual lease payments of $7 million are paid at the beginning of each year starting January 1, 2021. h. $78 million of bonds were retired at maturity. 1. In February, Arduous issued dividend (11.2 million shares). The market price of the $5 par value common stock was $7.50 per share at that time. J. In April, 1 million shares of common stock were repurchased as treasury stock at a cost of $27.00 million. Required: Prepare the statement of cash flows of Arduous Company for the year ended December 31, 2021. Present cash flows from operating activities by the direct method. (Do not round your intermediate calculations. Enter your answers in millions (ie., 10,000,000 should be entered as 10.). Amounts to be deducted should be indicated with a minus sign.) ARDUOUS COMPANY Statement of Cash Flows For year ended December 31, 2021 (in millions) Cash flows from operating activities: Cash inflows: Cash outflows 10 of 10 Nev 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 311 Noncash investing and financing activities