Exercise 21-27 (Static) Statement of cash flows; direct method [LO21-3, 21-5, 21-6, 21-8] 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 $ 24 $ 110 Cash 132 Accounts receivable 73 Prepaid insurance 285 175 Inventory 400 350 Buildings and equipment Less: Accumulated (119) (240) depreciation $ 775 $ 530 Liabilities $ 87 $ 100 Accounts payable Accrued liabilities Notes payable 160 Bonds payable Shareholders' Equity 400 400 Common stock 72 19 Retained earnings $ 775 $530 3 of 3 Next > RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue $2,000 Expenses Cost of goods sold $1,400 Depreciation expense 50 Operating expenses 447 1,897 Net income $ 103 Additional information from the accounting records a. During 2021, $230 million of equipment was purchased to replace $180 million of equipment (95% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $50 million, it was necessary for Red to borrow $50 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.)