7)

Portions of the financial statements for Hawkeye Company are provided below.

HAWKEYE COMPANY
Income Statement
For the Year Ended December 31, 2021
($ in millions)
Sales				$	910
Cost of goods sold					355
Gross margin					555
Operating expenses:
Salaries	$	233
Depreciation		191
Loss on sale of land		10
Total operating expenses					434
Operating income					121
Other income (expense):
Gain on sale of cash equivalents					4
Interest expense					(41	)
Income before tax					84
Income tax expense					42
Net income				$	42

HAWKEYE COMPANY
Selected Accounts from Comparative Balance Sheets
December 31, 2021 and 2020 ($ in millions)
	Year
	2021			2020			Change
Cash	$	214		$	201		$	13
Accounts receivable		396			423			(27	)
Inventory		862			851			11
Accounts payable		211			236			(25	)
Salaries payable		181			190			(9	)
Interest payable		57			51			6
Income tax payable		91			106			(15	)

Problem 21-9 (Algo) Part 1

Required: 1. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using 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.)

Cash Flows from Operating Activities:
Net cash flows from operating activities	$0