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. 2e2e 186 RED, INC. Comparative Balance Sheets December 31, 2021 and 202e ($ in millions) 2021 Assets Cash $ 35 $ 134 Accounts receivable 200 143 Prepaid insurance 5 3 Inventory 397 Buildings and equipment 422 361 Less: Accumulated depreciation (130) (251) $ 839 $ 576 Liabilities Accounts payable $ 98 $ 122 Accrued liabilities 9 Notes payable 81 @ Bonds payable @ Shareholders' Equity Common stock 411 411 Retained earnings 72 34 $ 839 $ 576 4 173 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,110 Expenses Cost of goods sold $1,424 Depreciation expense 41 Operating expenses 526 1,991 Net income $ 119 Additional Information from the accounting records: a. During 2021, $241 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 $81 million, it was necessary for Red to borrow $81 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 (1.e., 10,000,000 should be entered as 10).) Answer is not complete. RED, INC. Statement of Cash Flows For year ended December 31, 2021 (S in millions) Cash flows from operating activities: Net income s 119 Adjustments for noncash effects Depreciation expense 41 Changes in operating assets and liabilities: Decrease in accounts payable (24) Decrease in accrued liabilities (5) Increase in inventory (121) Increase in prepaid insurance (2 S 8 Net cash flows from operating activities Cash flows from investing activities: Purchase of equipment Sale of equipment (241) (162) (403) w Net cash flows from investing activities Cash flows from financing activities: Issuance of bonds payable Payment of dividends 173 O (81) 92 Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance. December 31 (303) 35 X $ (268)