A comparative balance sheet and an income statement for Blankley Company are presented below:

Kars Company Comparative Balance Sheet (dollars in millions)
	Ending Balance			Beginning Balance
Assets
Current assets:
Cash and cash equivalents	$	45		$	93
Accounts receivable		700			642
Inventory		680			634
Total current assets		1,425			1,369
Property, plant, and equipment		1,565			1,538
Less accumulated depreciation		806			669
Net property, plant, and equipment		759			869
Total assets	$	2,184		$	2,238
Liabilities and Stockholders' equity
Current liabilities:
Accounts payable	$	272		$	166
Accrued liabilities		186			164
Income taxes payable		89			78
Total current liabilities		547			408
Bonds payable		445			660
Total liabilities		992			1,068
Stockholders' equity:
Common stock		175			175
Retained earnings		1,017			995
Total stockholders' equity		1,192			1,170
Total liabilities and stockholders' equity	$	2,184		$	2,238

Kars Company Income Statement (dollars in millions)
Sales	$	3,880
Cost of goods sold		2,660
Gross margin		1,220
Selling and administrative expenses		892
Net operating income		328
Non operating items: Gain on sale of equipment		2
Income before taxes		330
Income taxes		124
Net income	$	206

Kars also provided the following information:

1.	The company sold equipment that had an original cost of $24 million and accumulated depreciation of $13 million. The cash proceeds from the sale were $13 million. The gain on the sale was $2 million.
2.	The company did not issue any new bonds during the year.
3.	The company paid a cash dividend during the year.
4.	The company did not complete any common stock transactions during the year.

Required:
1.	Using the indirect method, prepare a statement of cash flows for the year. (Enter your answers in millions not in dollars . Amounts to be deducted and negative amounts should be indicated with a minus sign.)

Kars Company Statement of Cash Flows
Operating activities:
(Click to select)Net lossNet income		$
Adjustments to convert net income to cash basis:
(Click to select)Increase in accounts payableIncrease in accrued liabilitiesGain on sale of equipmentIncrease in accounts receivableDecrease in accounts payableIncrease in inventoryIncrease in income taxes payableDecrease in inventoryDepreciation	$
(Click to select)Decrease in inventoryIncrease in accrued liabilitiesIncrease in inventoryGain on sale of equipmentIncrease in income taxes payableDepreciationDecrease in accounts payableIncrease in accounts receivableIncrease in accounts payable
(Click to select)Gain on sale of equipmentIncrease in accounts payableIncrease in accrued liabilitiesDecrease in accounts payableDecrease in inventoryDepreciationIncrease in accounts receivableIncrease in income taxes payableIncrease in inventory
(Click to select)DepreciationIncrease in inventoryIncrease in accounts receivableDecrease in accounts payableGain on sale of equipmentIncrease in accounts payableIncrease in income taxes payableIncrease in accrued liabilitiesDecrease in inventory
(Click to select)Increase in accounts receivableIncrease in income taxes payableIncrease in inventoryIncrease in accounts payableDecrease in inventoryDepreciationIncrease in accrued liabilitiesGain on sale of equipmentDecrease in accounts payable
(Click to select)Decrease in inventoryIncrease in inventoryGain on sale of equipmentIncrease in accrued liabilitiesIncrease in accounts payableDepreciationDecrease in accounts payableIncrease in income taxes payableIncrease in accounts receivable
(Click to select)Decrease in inventoryIncrease in income taxes payableIncrease in accounts payableIncrease in accounts receivableIncrease in accrued liabilitiesDepreciationGain on sale of equipmentDecrease in accounts payableIncrease in inventory
Net cash (Click to select)provided byused in operating activities
Investing activities:
(Click to select)DepreciationProceeds from sale of equipmentIncrease in accounts receivableCash dividendsIncrease in inventoryDecrease in inventoryIncrease in property, plant and equipmentIssuance in bonds payableDecrease in property, plant and equipment
(Click to select)Increase in property, plant and equipmentDecrease in inventoryCash dividendsDepreciationProceeds from sale of equipmentIncrease in accounts receivableIssuance in bonds payableIncrease in inventoryDecrease in property, plant and equipment
Net cash (Click to select)provided byused in investing activities
Financing activities:
(Click to select)Decrease in inventoryRetirement of bonds payableCash dividendsIncrease in accounts payableIncrease in accounts receivableAdditions to plant and equipmentProceeds from sale of equipmentDecrease in accrued liabilitiesDecrease in accounts payable
(Click to select)Additions to plant and equipmentIncrease in accounts receivableDecrease in accrued liabilitiesRetirement of bonds payableProceeds from sale of equipmentIncrease in accounts payableDecrease in accounts payableCash dividendsDecrease in inventory
Net cash (Click to select)used inprovided by financing activities
(Click to select)Net increase in cashNet decrease in cash
Cash balance, beginning of year
Cash balance, end of year		$