Problem 21-3 Statement of cash flows; direct method [LO21-3, 21-8] The comparative balance sheets for 2018 and 2017 and the statement of income for 2018 are given below for National Intercable Company. Additional information from NIC's accounting records is provided also. NATIONAL INTERCABLE COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) Prepaid insurance Inventory Long-term investment Land Assets Cash Accounts receivable Less: Allowance for uncollectible accounts $ 57 $ 55 181 (8) 170 (6) 12 Buildings and equipment Less: Accumulated depreciation Trademark Liabilities Accounts payable Salaries payable Deferred income tax liability Lease liability Bonds payable $ 30 $ 45 3 18 68 145 Less: Discount on bonds (22) Shareholders' Equity Common stock 310 Paid-in capital-excess of par Preferred stock 95 50 Retained earnings 155 $ 852 2018 2017 7 170 165 66 90 150 150 290 270 (85) (75) 24 25 $ 852 856 , 8 15 0 275 (25) 290 85 0 163 $ 856 NATIONAL INTERCABLE COMPANY Income Statement For Year Ended December 31, 2018 ($ in millions) Revenues Sales revenue Investment revenue $ 320 15 Gain on sale of investments 5 $340 Expenses Cost of goods sold 125 Salaries expense 55 Depreciation expense 25 Trademark amortization expense 1 Bad debt expense 7 Insurance expense 13 Bond interest expense 30 Loss on building fire 42 Income before tax Income tax expense Net income Additional information from the accounting records: a. Investment revenue includes National Intercable Company's $6 million share of the net income of Central Fiber Optics Corporation, an equity method investee. b. A long-term investment in bonds, originally purchased for $30 million, was sold for $35 million. c. Pretax accounting income exceeded taxable income, causing the deferred income tax liability to increase by $3 million. d. A building that originally cost $60 million, and which was one-fourth depreciated, was destroyed by fire. Some undamaged parts were sold for $3 million. e. The right to use a building was acquired with a seven-year lease agreement; present value of lease payments, $80 million. Annual lease payments of $12 million are paid at Jan. 1 of each year starting in 2018. f. $130 million of bonds were retired at maturity. g. $20 million par value of common stock was sold for $30 million, and $50 million of preferred stock was sold at par. h. Shareholders were paid cash dividends of $30 million. Required: 2. Prepare the statement of cash flows. Present cash flows from operating activities by the direct 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.)