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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

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 $ 42 $ 138
Accounts receivable 194 150
Prepaid insurance 14 8
Inventory 300 193
Buildings and equipment 436 368
Less: Accumulated depreciation (137 ) (258 )
$ 849 $ 599
Liabilities
Accounts payable $ 105 $ 136
Accrued expenses payable 13 21
Notes payable 68 0
Bonds payable 144 0
Shareholders Equity
Common stock 418 418
Retained earnings 101 24
$ 849 $ 599

RED, INC. Statement of Income For Year Ended December 31, 2018
($ in millions)
Revenues
Sales revenue $ 2,180
Expenses
Cost of goods sold $ 1,468
Depreciation expense 41
Operating expenses 526 2,035
Net income $ 145

Additional information from the accounting records:

During 2018, $248 million of equipment was purchased to replace $180 million of equipment (90% depreciated) sold at book value.

In order to maintain the usual policy of paying cash dividends of $68 million, it was necessary for Red to borrow $68 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.)

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