m the accounting records of Palmer, Inc, are provided below Palmer, Inc Comparative Balance Sheets December 31, 20x4 and 20x5 ($ in millions) sheets for 20x4 and 20xS, a statement of income for 2 balance s Assets Cash Accounts receivable $24 $110 178 132 Prepaid insurance 285 175 400 350 Less: Accumulated depreciation (119) (240 $775 $530 Inventory Buildings and equipment Liabilities Accounts payable Accrued expenses payable Notes payable Bonds payable Shareholders' Equity Common stock Retained earnings $87 $100 50 0 1600 400 400 72 19 $775 $530 Problem 3 (cont'd) Palmer, Inc. Statement of Income For Year Ended December 31, 20x5 Revenues Sales revenue Expenses Cost of goods sold Depreciation expense Operating expenses Net income $2,000 $1,400 50 447 1,897 103 Additional information from the accounting records: a. During 20X5, $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 Palmer to borrow $50 million from its bank. Required Prepare the statement of cash flows of Palmer, Inc. for the year ended December 31, 20X5. Present cash flows from operating activities by the direct method