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Comparative balance sheets for 2016 and 2015, a statement of income for 2016, and additional information from the accounting records of Red, Inc., are provided

Comparative balance sheets for 2016 and 2015, a statement of income for 2016, and additional information from the accounting records of Red, Inc., are provided below.

RED, INC. Comparative Balance Sheets December 31, 2016 and 2015 ($ in millions)
2016 2015
Assets
Cash $ 38 $ 110
Accounts receivable 215 146
Prepaid insurance 13 7
Inventory 280 200
Buildings and equipment 428 364
Less: Accumulated depreciation (133 ) (254 )
$ 841 $ 573
Liabilities
Accounts payable $ 101 $ 128
Accrued expenses payable 12 17
Notes payable 64 0
Bonds payable 150 0
Shareholders Equity
Common stock 414 414
Retained earnings 100 14
$ 841 $ 573

RED, INC. Statement of Income For Year Ended December 31, 2016 ($ in millions)
Revenues
Sales revenue $ 2,140
Expenses
Cost of goods sold $ 1,447
Depreciation expense 23
Operating expenses 520 1,990
Net income $ 150

Additional information from the accounting records:

a.

During 2016, $244 million of equipment was purchased to replace $180 million of equipment (80% depreciated) sold at book value.

b.

In order to maintain the usual policy of paying cash dividends of $64 million, it was necessary for Red to borrow $64 million from its bank.

Required:

Prepare the statement of cash flows of Red, Inc. using the direct method to report operating activities. (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.)

RED, INC.
Statement of Cash Flows
For year ended December 31, 2016 ($ 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

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