Comparative balance sheets for $2024$ and $2023,$ a statement of income for $2024,$ and additional information from the accounting

records of Red, Incorporated, are provided below:

Additional information from the accounting records:

a$.$ During $2024,$$$241$ million of equipment was purchased to replace $$180$ million of equipment $(90\%$ depreciated$)$ sold at book

value.

b$.$ In order to maintain the usual policy of paying cash dividends of $$61$ million, it was necessary for Red to borrow $$61$ million from

its bank.

Required:

Prepare the statement of cash flows of Red, Incorporated, for the year ended December $31,2024,$ using the direct method to report

operating activities.

Note: Enter your answers in millions $($i$.$e$.,10,000,000$ should be entered as $10).$ Cash outflows should be indicated with a minus

sign.Comparative balance sheets for $2024$ and $2023,$ a statement of income for $2024,$ and additional information from the accounting records of Red, Incorporated, are provided below:

RED, INCORPORATED

Comparative Balance Sheets

December $31,2024$ and $2023($$ in millions$)$

$20242023$

Assets

Cash $ $35$ $ $134$

Accounts receivable $200143$

Prepaid insurance $53$

Inventory $307186$

Buildings and equipment $422361$

Less: Accumulated depreciation $(130)(251)$

$ $839$ $ $576$

Liabilities

Accounts payable $ $98$ $ $122$

Accrued liabilities $49$

Notes payable $610$

Bonds payable $1730$

Shareholders$$ Equity

Common stock $411411$

Retained earnings $9234$

$ $839$ $ $576$

RED, INCORPORATED

Statement of Income

For Year Ended December $31,2024$

$($$ in millions$)$

Revenues

Sales revenue $ $2,110$

Expenses

Cost of goods sold $ $1,424$

Depreciation expense $41$

Operating expenses $5261,991$

Net income $ $119$

Additional information from the accounting records:

During $2024,$ $$241$ million of equipment was purchased to replace $$180$ million of equipment $(90\%$ depreciated$)$ sold at book value.

In order to maintain the usual policy of paying cash dividends of $$61$ million, it was necessary for Red to borrow $$61$ million from its bank.

Required:

Prepare the statement of cash flows of Red, Incorporated, for the year ended December $31,2024,$ using the direct method to report operating activities.