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 $ 28 $ 114 Accounts receivable 184 136 Prepaid insurance 13 8. Inventory 250 179 Buildings and equipment 451 354 Less: Accumulated depreciation (123) (244) $ 803 $ 547 Liabilities Accounts payable $ 93 $ 108 Accrued liabilities 12 18 Notes payable 54 0 Bonds payable 172 Shareholders' Equity Common stock 404 404 Retained earnings 68 17 $ 803 $ 547 0 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,020 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,020 Expenses Cost of goods sold $1,414 Depreciation expense 41 Operating expenses 460 1,915 Net income 105 Additional information from the accounting records: a. During 2021, $277 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 $54 million, it was necessary for Red to borrow $54 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.) Answer is complete but not entirely correct. RED, INC. Statement of Cash Flows For year ended December 31, 2021 (S in millions) For year ended December 31, 2021 (s in millions) Cash flows from operating activities: Cash inflows. From customers $ 1,972 Cash outflows. To suppliers of goods For operating expenses (1,500) (471) $ 1 Net cash flows from operating activities Cash flows from investing activities: Purchase of equipment Sale of equipment (277) 18 (259) Net cash flows from investing activities Cash flows from financing activities: Issuance of note payable Issuance of bonds payable Payment of dividends 54 172 (54) 172 (86) Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 "Cash balance December 31 172 x 86