The comparative balance sheets for 2021 and 2020 are given below for Surmise Company. Net income for 2021 was $72 million.

SURMISE COMPANY Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions)
	2021				2020
Assets
Cash	$	25			$	32
Accounts receivable		85				98
Less: Allowance for uncollectible accounts		(19	)			(3	)
Prepaid expenses		13				12
Inventory		118				100
Long-term investment		110				75
Land		90				90
Buildings and equipment		368				250
Less: Accumulated depreciation		(125	)			(100	)
Patent		21				24
	$	686			$	578
Liabilities
Accounts payable	$	15			$	34
Accrued liabilities		4				16
Notes payable		40				0
Lease liability		110				0
Bonds payable		60				120
Shareholders Equity
Common stock		65				50
Paid-in capitalexcess of par		261				205
Retained earnings		131				153
	$	686			$	578

Required: Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2021. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for changes in some account balances. A spreadsheet or T-account analysis will be helpful. (Hint: The right to use a building was acquired with a seven-year lease agreement. Annual lease payments of $8 million are paid at January 1 of each year starting in 2021.) (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.)

SURMISE COMPANY Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Net income S Adjustments for noncash effects: Depreciation expense Bad debt expense Amortization expense 72 > 25 16 3 13 Changes in operating assets and liabilities: Decrease in accounts receivable Increase in inventory Decrease in accounts payable Decrease in accrued liabilities Increase in prepaid expenses (18) (19) (12) (1) S 79 Net cash flows from operating activities Cash flows from investing activities: (35) (35) (94) Purchase of long-term investment Net cash flows from investing activities Cash flows from financing activities: Payment of dividends Issuance of notes payable Retirement of bonds payable Payment of lease liability Sale of common stock O 40 (60) 8% (15) (121) 32 Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31 Noncash investing and financing activities: Acquired use of buildings by lease S 25 S 118 * Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted