Problem $21-11($Algo$)$ Prepare a statement of cash flows; direct method $[$LO$21-3,21-8]$

The comparative balance sheets for $2024$ and $2023$ and the income statement for $2024$ are given below for Arduous Company. Additional information from Arduous$$s accounting records is provided also.

ARDUOUS COMPANY

Comparative Balance Sheets

December $31,2024$ and $2023$

$($$ in millions$)$

$20242023$

Assets

Cash $ $138$ $ $96$

Accounts receivable $205224$

Investment revenue receivable $2319$

Inventory $222215$

Prepaid insurance $2128$

Long$-$term investment $203140$

Land $226165$

Buildings and equipment $427430$

Less: Accumulated depreciation $(109)(150)$

Patent $4347$

$ $1,399$ $ $1,214$

Liabilities

Accounts payable $ $65$ $ $95$

Salaries payable $2333$

Interest payable $($bonds$)2519$

Income tax payable $2732$

Deferred tax liability $4123$

Notes payable $310$

Lease liability $890$

Bonds payable $230305$

Less: Discount on bonds $(37)(46)$

Shareholders$$ Equity

Common stock $475425$

Paid$-$in capital$$excess of par $125100$

Preferred stock $900$

Retained earnings $239228$

Less: Treasury stock $(24)0$

$ $1,399$ $ $1,214$

ARDUOUS COMPANY

Income Statement

For Year Ended December $31,2024$

$($$ in millions$)$

Revenues and gain:

Sales revenue $ $557$

Investment revenue $28$

Gain on sale of Treasury bills $4$ $ $589$

Expenses and loss:

Cost of goods sold $195$

Salaries expense $88$

Depreciation expense $9$

Amortization expense $4$

Insurance expense $22$

Interest expense $43$

Loss on sale of equipment $30$

Income tax expense $51442$

Net income $ $147$

Additional information from the accounting records:

Investment revenue includes Arduous Company$$s $$23$ million share of the net income of Demur Company, an equity method investee.

Treasury bills were sold during $2024$ at a gain of $$4$ million. Arduous Company classifies its investments in Treasury bills as cash equivalents.

Equipment originally costing $$100$ million that was one$-$half depreciated was rendered unusable by a flood. Most major components of the equipment were unharmed and were sold for $$20$ million.

Temporary differences between pretax accounting income and taxable income caused the deferred tax liability to increase by $$18$ million.

The preferred stock of Tory Corporation was purchased for $$40$ million as a long$-$term investment.

Land costing $$61$ million was acquired by issuing $$30$ million cash and a $14\%,$ four$-$year, $$31$ million note payable to the seller.

The right to use a building was acquired with a $15-$year lease agreement; present value of lease payments, $$97$ million. Annual lease payments of $$8$ million are paid at the beginning of each year starting January $1,2024.$

$$75$ million of bonds were retired at maturity.

In February, Arduous issued a stock dividend $(10\mathrm{.}0$ million shares$).$ The market price of the $$5$ par value common stock was $$7\mathrm{.}50$ per share at that time.

In April, $1$ million shares of common stock were repurchased as treasury stock at a cost of $$24\mathrm{.}00$ million.

Required:

Prepare the statement of cash flows of Arduous Company for the year ended December $31,2024.$ Present cash flows from operating activities by the direct method..