6 ARDUOUS COMPANY Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 Assets Cash $ 109 Accounts receivable 190 Investment revenue receivable Inventory 205 Prepaid insurance 4 Long-term investment 156 Land 196 Buildings and equipment 412 Less: Accumulated (97) depreciation Patent 30 $1,211 Liabilities Accounts payable 50 Salaries payable Interest payable (bonds) Income tax payable Deferred tax liability Notes payable 23 Lease liability Bonds payable 215 Less: Discount on bonds (22) Shareholders' Equity Common stock 430 Paid-in capital-excess of par Preferred stock Retained earnings 242 Less: Treasury stock (9) $1,211 2020 $ 81 194 4 200 8 125 150 400 (120) 32 $1,074 $ 65 8 14 11 75 275 (25) ********@**50| 410 95 85 75 227 $1,074 11 ARDUOUS COMPANY Income Statement For Year Ended December 31, 2021 ($ in millions) Revenues and gain: Sales revenue $410 Investment revenue Gain on sale of Treasury 2 $423 bills Expenses and loss: Cost of goods sold Salaries expense Depreciation expense Amortization expense Insurance expense Interest expense Loss on sale of equipment Income tax expense Net income 180 a. Investment revenue includes Arduous Company's $6 million share of the net income of Demur Company, an equity method investee. b. Treasury bills were sold during 2021 at a gain of $2 million. Arduous Company classifies its investments in Treasury bills as cash equivalents. c. Equipment originally costing $70 million that was one-half depreciated was rendered unusable by a flood. Most major components of the equipment were unharmed and were sold for $17 million. d. Temporary differences between pretax accounting income and taxable income caused the deferred tax liability to increase by $3 million. e. The preferred stock of Tory Corporation was purchased for $25 million as a long-term investment. f. Land costing $46 million was acquired by issuing $23 million cash and a 15%, four-year, $23 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, $82 million. Annual lease payments of $7 million are paid at the beginning of each year starting January 1, 2021. h. $60 million of bonds were retired at maturity. i. In February, Arduous issued dividend (4 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 $9 million. Required: Prepare the statement of cash flows of Arduous Company for the year ended December 31, 2021. Present cash flows from operating activities by the direct method. (Do not round your intermediate calculations. Enter your answers in millions (i.e., 10,000,000 should be entered as 10.). Amounts to be deducted should be indicated with a minus sign.) ARDUOUS COMPANY Statement of Cash Flows For year ended December 31, 2021 ($ in millions Cash flows from operating activities: Cash inflows: ! Cash outflows: 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 Noncash investing and financing activities