Problem 21-9 (Algo) Cash flows from operating activities (direct method and indirect method)-cash equivalent (LO21-3, 21-4) (The following information applies to the questions displayed below.) Portions of the financial statements for Hawkeye Company are provided below. HAWKEYE COMPANY Income Statement For the Year Ended December 31, 2021 ($ in millions) Sales $ 930 Cost of goods sold 365 Gross margin 565 Operating expenses: Salaries Depreciation Loss on sale of land Total operating expenses 440 Operating income 125 other income (expense): Gain on sale of cash equivalents Interest expense (43) Income before tax 86 Income tax expense 43 Net income $ 43 $ 235 193 12 HAWKEVE CAMDANIV LUSS VI JA VI Lalu -- 440 125 Total operating expenses Operating income other income (expense): Gain on sale of cash equivalents Interest expense Income before tax Income tax expense Net income 4 (43) 86 43 $ 43 HAWKEYE COMPANY Selected Accounts from comparative Balance sheets December 31, 2021 and 2020 ($ in millions) Year 2021 2020 Change Cash $218 $203 $ 15 Accounts receivable 398 427 (29) Inventory 866 853 13 Accounts payable 213 240 Salaries payable 183 194 (11) Interest payable 61 53 Income tax payable 93 110 (17) (27) 8 Problem 21-9 (Algo) Part 1 Required: 1. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the direct method. (Enter your answers in millions (l.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.) Answer is not complete. 901 4 Cash Flows from Operating Activities: Cash received from customers Gain on sale of cash equivalents Cash paid to suppliers Cash paid to employees Cash paid for interest Gain on sale of cash equivalents Cash paid for interest Cash paid for income taxes Net cash flows from operating activities $ 905