Exercise 21-31 Statement of cash flows;Indirect method [LO21-4, 21-5, 21-6, 21-8] Appendix A Comparative balance sheets for 2018 and 2017. a statement of income for 2018, and additional information from the accounting records of Red, Inc., are provided below. RED, INC. Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) 2018 2017 Assets Cash $ 37 $ 136 Accounts receivable 229 135 Prepaid insurance 12 Inventory 291 178 Buildings and equipment 386 353 Less: Accumulated depreciation (122) (243) $ 564 Liabilities Accounts payable $ 99 $ 106 Accrued expenses payable Notes payable Bonds payable 210 Shareholders' Equity Common stock 403 Retained earnings 13 73 43 $564 RED, INC. Statement of Income For Year Ended December 31, 2018 ($ in millions) Revenues Sales revenue $2,020 Expenses Cost of goods sold $1,412 Depreciation expense Operating expenses 471 1,952 Net income $ 68 69 Additional information from the accounting records: g 2018, $233 million of equipment was purchased to replace $200 million of equipment (95% depreciated) sold at book value b. In order to maintain the usual policy of paying cash dividends of $73 million, it was necessary for Red to borrow $73 million from its bank. Requlred: Prepare the statement of cash flows of Red, Inc. using the indirect method to report operating activities. (Amounts to be deducted should be Indicated with a minus sign. Enter your answers in millions (.e., 10,000,000 should be entered as 10).) RED, INC. Statement of Cash Flows For year ended December 31, 2018 ($ in millions) Cash flows from operating activities: Net income Adjustments for noncash effects: Changes in operating assets and liabilities: Net cash flows from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31