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 NICs accounting records is provided also.

NATIONAL INTERCABLE COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions)
	2018				2017
Assets
Cash	$	154			$	135
Accounts receivable		404				395
Less: Allowance for uncollectible accounts		(8	)			(6	)
Prepaid insurance		8				13
Inventory		384				375
Long-term investment		70				115
Land		260				260
Buildings and equipment		390				360
Less: Accumulated depreciation		(155	)			(125	)
Trademark		18				20
	$	1,525			$	1,542
Liabilities
Accounts payable	$	51			$	70
Salaries payable		4				7
Deferred income tax liability		19				16
Lease liability		97				0
Bonds payable		155				325
Less: Discount on bonds		(31	)			(36	)
Shareholders' Equity
Common stock		390				360
Paid-in capitalexcess of par		140				130
Preferred stock		60				0
Retained earnings		640				670
	$	1,525			$	1,542

NATIONAL INTERCABLE COMPANY Income Statement For Year Ended December 31, 2018 ($ in millions)Revenues Sales revenue$550 Investment revenue 17 Gain on sale of investments 5 $572 Expenses Cost of goods sold 250 Salaries expense 75 Depreciation expense 50 Trademark amortization expense 2 Bad debt expense 6 Insurance expense 40 Bond interest expense 55 Loss on building fire 54 532 Income before tax 40 Income tax expense 35 Net income $5

Required: 2. Prepare the statement of cash flows. Present cash flows from operating activities by the direct method.