Comparative balance sheets for 2021 and 2020, a statement of income for 2021, and additional information from the accounting records of Red, Inc., are provided below. RED, INC Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash $ 29 $ 114 Accounts receivable 188 137 Prepaid insurance 14 6 Inventory 252 180 Buildings and equipment 453 355 Less: Accumulated depreciation (124) (245) $ 812 $ 547 Liabilities Accounts payable $ 95 $ 110 Accrued liabilities 1320 Notes payable 25 Bonds payable 1620 Shareholders' Equity Common stock 405 405 Retained earnings 112 $ 812 $ 547 12 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,030 Expenses Cost of goods sold $1,430 Depreciation expense 41 Operating expenses 434 1,905 Net income $ 125 Additional information from the accounting records: a. During 2021, $278 million of equipment was purchased to replace $180 million of equipment (90% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $25 million, it was necessary for Red to borrow $25 million from its bank. Required: Prepare the statement of cash flows for Red, Inc., using the indirect method to report operating activities. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) RED, INC. Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Net income Adjustments for noncash effects: Depreciation expense Changes in operating assets and liabilities: Increase in accounts receivable Increase in prepaid insurance Increase in inventory Decrease in accounts payable Decrease in accrued liabilities Net cash flows from operating activities Cash flows from investing activities: Sale of equipment Purchase of equipment Net cash flows from investing activities Cash flows from financing activities: Issuance of note payable Issuance of bonds payable Payment of dividends Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31