Required information 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 Cost of goods sold Gross margin Operating expenses: Salaries Depreciation Loss on sale of land Total operating expenses Operating income other income (expense): Gain on sale of cash equivalents 4 Interest expense (43) Income before tax 86 Income tax expense 43 Net income $ 930 365 565 $ 235 193 12 440 125 4321 $ 43 43 Income tax expense Net income 11 $ 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 (27) Salaries payable 183 194 (11) Interest payable 61 53 8 Income tax payable 93 110 (17) Problem 21-9 (Algo) Part 2 Required: 2. Prepare the cash flows from operating activities section of the statement of cash flows for Hawkeye Company using the indirect 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.) 945 Cash Flows from Operating Activities: Net income Adjustments for noncash effects: Depreciation expense Changes in operating assets and liabilities: Decrease in accounts payable Decrease in accounts receivable Decrease in income tax payable Increase in accounts payable Decrease in salaries payable Loss on sale of land Loss on sale of equipment Decrease in inventory Loss on sale of land Net cash flows from operating activities X 945