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 $ 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 liabilities 13 Notes payable 68 0 Bonds payable 144 Shareholders' Equity Common stock 418 418 Retained earnings 101 24 $ 849 $ 599 21 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ 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: a. During 2021, $248 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 $68 million, it was necessary for Red to borrow $68 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).) Anvel 15 HIUL LUMPiele. RED, INC. Statement of Cash Flows For year ended December 31, 2021 (S 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 accrued liabilities Decrease in accounts payable $ 0 Net cash flows from operating activities Cash flows from investing activities: Sale of equipment Purchase of equipment 0 Net cash flows from investing activities Cash flows from financing activities: Payment of dividends Issuance of note payable Issuance of bonds payable 0 0 Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31 0