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 $ $24$ $ $110$

Accounts receivable $178132$

Prepaid insurance $73$

Inventory $285175$

Buildings and equipment $400350$

Less: Accumulated depreciation $(119)(240)$

$ $775$ $ $530$

Liabilities

Accounts payable $ $87$ $ $100$

Accrued liabilities $611$

Notes payable $500$

Bonds payable $1600$

Shareholders$$ Equity

Common stock $400400$

Retained earnings $7219$

$ $775$ $ $530$

RED, INCORPORATED

Statement of Income

For Year Ended December $31,2024$

$($$ in millions$)$

Revenues

Sales revenue $ $2,000$

Expenses

Cost of goods sold $ $1,400$

Depreciation expense $50$

Operating expenses $4471,897$

Net income $ $103$

Additional information from the accounting records:

During $2024,$ $$230$ million of equipment was purchased to replace $$180$ million of equipment $(95\%$ depreciated$)$ sold at book value.

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, 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.