RED, INC. Statement of Cash Flow For year ended December 31, 2021 (5 in millions) Cash flows from operating activities: Net income Adjustments for noncash effects: Increase in accounts receivable Changes in operating assets and liabilities: $ Net cash flows from operating activities Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: 0 0 Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31 $ Comparative Balance sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Canh $ 37 122 Accounts receivable 210 165 Prepaid insurance 11 9 Inventory 270 189 Muildings and equipment 424 363 LARRI Accumulated depreciation (132) (253) $ 822 $ 574 Liabilities Accounts payable $ 100 $126 Recrued liabilities 10 Notex payable 73 0 Bonde payable 176 0 Shareholders' Equity Common stock 413 413 Retained earnings SO 19 $ 822 574 16 RED, INC. Statement of Income Tor Year Ended December 31, 2021 in million) Tevens Sales revenue $2,210 Expenses Cost of goods sold $1,515 Depreciation expense 41 Operating expenses 5502,106 Not Income 104 Additional information from the accounting records: a. During 2021, $243 million of equipment was purchased to replace $180 million of equipment (90% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $73 million, it was necessary for Red to borrow $73 million from its bank