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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

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 $ 39 $ 95
Accounts receivable 228 147
Prepaid insurance 10 5
Inventory 240 201
Buildings and equipment 430 375
Less: Accumulated depreciation (134 ) (255 )
$ 813 $ 568
Liabilities
Accounts payable $ 102 $ 130
Accrued liabilities 9 18
Notes payable 65 0
Bonds payable 169 0
Shareholders Equity
Common stock 415 415
Retained earnings 53 5
$ 813 $ 568

RED, INC. Statement of Income For Year Ended December 31, 2021
($ in millions)
Revenues
Sales revenue $ 2,150
Expenses
Cost of goods sold $ 1,445
Depreciation expense 32
Operating expenses 560 2,037
Net income $ 113

Additional information from the accounting records:

  1. During 2021, $235 million of equipment was purchased to replace $180 million of equipment (85% depreciated) sold at book value.
  2. In order to maintain the usual policy of paying cash dividends of $65 million, it was necessary for Red to borrow $65 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).)

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