Answer Happy

Comparative balance sheets for 2021 and 2020, a statement of Income for 2021, and additional Information from the accounting records of Red, Inc., are provided below. RED, INC. Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash $ 24 Accounts receivable 178 Prepaid Insurance 7 Inventory 285 Buildings and equipment 400 Less: Accumulated depreciation (119) (240) $775 Liabilities Accounts payable Accrued liabilities Notes payable Bonds payable Shareholders' Equity Common stock Retained earnings ន ៖ ” < ឱ | ៖ ខ្ញុំ៖ $ 87 6 50 160 400 72 $ 775 RED, INC. Statement of Income For Year Ended December 31, 2021 ($ in millions) Revenues Sales revenue Expenses Cost of goods sold $1,400 Depreciation expense 50 Operating expenses 447 Net income $2,000 1,897 $ 103 Additional information from the accounting records: a. During 2021, $230 million of equipment was purchased to replace $180 million of equipment (95% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $50 million, it was necessary for Red to borrow $50 million from its bank.
Required: Prepare the statement of cash flows (direct method) for Red, Inc. Use the T-account method to assist in your analysis. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).) RED, INC. Statement of Cash Flows For year ended December 31, 2021 (S in millions) Cash flows from operating activities Cash inflows: S 103 Cash outflows: $ 103 Net cash flows from operating activities Cash flows from investing activities: 0 Net cash flows from investing activities Cash flows from financing activities: 0 103 Net cash flows from financing activities Net increase (decrease) in cush Cash balance, January 1 Cash balance, December 31 $ 103