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.

Additional information from the accounting records:

a. During 2021, $272 million of equipment was purchased to replace $210 million of equipment (80% depreciated) sold at book value.

b. In order to maintain the usual policy of paying cash dividends of $62 million, it was necessary for Red to borrow $62 million from its bank.

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