Comparative balance sheets for 2018 and 2017, a statement of income for 2018, and additional information from the accounting records of Red, Inc., are provided below.

Additional information from the accounting records:
a. During 2018, $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 of Red, Inc., for the year ended December 31, 2018. Present cash flows from operating activities by the direct method. (You may omit the schedule to reconcile net income with cash flows from operating activities.)

RED, INC. Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions) 2018 2017 Assets S 24 178 $ 110 132 Accounts receivable Prepaid insurance 285 400 (119) 775 175 350 (240) S 530 Buildings and equipment Less: Accumulated depreciation Llablitles Accounts payable Accrued expenses payable Notes payable Bonds payable Shareholders' Equlty Common stock Retained earnings $ 87 6 50 160 $ 100 0 0 400 72 S 775 400 19 $ 530 RED, INC. Statement of Income For Year Ended December 31, 2018 (S in millions) Sales revenue $2,000 Cost of goods sold Depreciation expense Operating expenses Net Income $1,400 50 447 1,897 $ 103