***PLEASE ANSWER BOTH QUESTIONS***

1.Portions of the financial statements for Myriad Products are provided below.

MYRIAD PRODUCTS COMPANY Income Statement For the Year Ended December 31, 2021 ($ in millions)
Sales					$	660
Cost of goods sold						250
Gross margin						410
Salaries expense	$	110
Depreciation expense		90
Amortization expense		5
Interest expense		20
Loss on sale of land		3				228
Income before taxes						182
Income tax expense						91
Net Income					$	91

MYRIAD PRODUCTS COMPANY Selected Accounts from Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions)
	Year
	2021			2020			Change
Cash	$	102		$	100		$	2
Accounts receivable		220			232			(12	)
Inventory		440			450			(10	)
Accounts payable		140			134			6
Salaries payable		80			86			(6	)
Interest payable		25			20			5
Income tax payable		15			10			5

Required: Prepare the cash flows from the operating activities section of the statement of cash flows for Myriad Products Company using the indirect method. (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.)

2.

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	$	24			$	110
Accounts receivable		178				132
Prepaid insurance		7				3
Inventory		285				175
Buildings and equipment		400				350
Less: Accumulated depreciation		(119	)			(240	)
	$	775			$	530
Liabilities
Accounts payable	$	87			$	100
Accrued liabilities		6				11
Notes payable		50				0
Bonds payable		160				0
Shareholders Equity
Common stock		400				400
Retained earnings		72				19
	$	775			$	530

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:

1. During 2021, $230 million of equipment was purchased to replace $180 million of equipment (95% depreciated) sold at book value.
2. 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 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).)