16 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. moints 254 RED, INC. Comparative Balance Sheets December 31, 2021 and 2020 (5 in millions) 2021 2020 Assets Cash $ 30 $ 122 Accounts receivable 190 138 Prepaid insurance 13 Inventory 181 Buildings and equipment 455 356 Less Accumulated depreciation (125) (246) $ 817 $ 560 Liabilities Accounts payable 97 $ 112 Accred liabilities 12 21 Notes payable 56 0 Bonds payable 162 0 Shareholders' Equity Common stock 406 406 Retained earnings 21 $ 817 $ 560 $ RED, INC. Statement of Income For Year Ended December 31, 2021 (5 in illons Revenues Sales revenue $2,080 Expenses Cost of goods sold $1.444 Depreciation expense 31 Operating expenses 486 1.961 Net income Additional Information from the accounting records a. During 2021 $289 million of equipment was purchased to replace $190 million of equipment (80% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $56 million, it was necessary for Red to borrow $56 million from its bank Required: Prepare the statement of cash flows of Red, Inc., using the direct method to report operating activities. (Enter your answers in millions lle., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.) RED, INC. Statement of Income Yor Year Ended December 31, 2021 ($ in millions Revenues Sales revenue $2,080 Expenses Cost of goods sold $1,444 Depreciation expense 31 Operating expenses 486 1,961 Net Income $ 119 Additional information from the accounting records: a. During 2021, $289 million of equipment was purchased to replace $190 million of equipment (80% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $56 million, it was necessary for Red to borrow $56 million from its bank. Required: Prepare the statement of cash flows of Red, Inc, using the direct method to report operating activities. (Enter your answers in millions (.e., 10,000,000 should be entered as 10). Amounts to be deducted should be indicated with a minus sign.) Answer is not complete. RED, INC Statement of Cash Flows For year ended December 31, 2021 (5 in millions) Cash flows from operating activities Cash inflows: From customers Cash outflows To suppliers of goods For operating expenses 3 0 Net cash fows from operating activities Cash flows from investing activities Purchase of equipment Sale of equipment 0 Ner cash flows from investing activities Cash flows from financing activities: a. During 2021, $289 million of equipment was purchased to replace 5190 million of equipment (80% depreciated) sold at book value. b. In order to maintain the usual policy of paying cash dividends of $56 million, it was necessary for Red to borrow $56 million from its bank Required: Prepare the statement of cash flows of Red, Inc., using the direct method to report operating activities. (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.) Answer is not complete. RED, INC. Statement of Cash Flows For year ended December 31, 2021 (5 in milions) Cash flows from operating activities: Cash inflows: From customers Cash outflows: To suppliers of goods For operating expenses $ 0 Net cash flows from operating activities Cash flows from investing activities: Purchase of equipment Sale of equipment 3 0 Net cash flows from investing activities Cash flows from financing activities: Issuance of note payable Issuance of bonds payable Payment of dividends OOO 0 0 Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31 $ o