Comparative balance sheets for 2018 and 2017, a statement of Income for 2018, and additional Information from the accounting records of Red, Inc., are provided below. RED, INC. Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) 2018 2017 Assets Cash $ 32 $ 153 Accounts receivable 175 141 Prepaid insurance 95 Inventory 300 184 Buildings and equipment 418 359 Less: Accumulated (128) (249) depreciation $ 806 $ 593 Liabilities Accounts payable $ 96 $ 118 Accrued expenses payable 8 12 Notes payable 59 Bonds payable 175 Shareholders' Equity Common stock 409 409 Retained earnings $ 806 $ 593 59 54 RED, INC. Statement of Income For Year Ended December 31, 2018 ($ in millions) Revenues Sales revenue $2,090 Expenses Cost of goods sold $1,361 Depreciation expense 69 Operating expenses 596 2,026 Net income $ 64 Additional Information from the accounting records: a. During 2018, $259 million of equipment was purchased to replace $200 million of equipment (95% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $59 million. It was necessary for Red to borrow $59 million from its bank. Required: Prepare the statement of cash flows of Red, Inc., using the direct method to report operating activities. (Enter your answers in millions (l.e., 10,000,000 should be entered as 10). Amounts to be deducted should be Indicated with a minus sign.) RED, INC. Statement of Cash Flows For year ended December 31, 2018 ($ 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