Exercise $21-30($Algo$)$ Statement of cash flows; indirect method $[$LO$21-3,21-4,21-5]$ Comparative balance sheets for $2027$ and $2026,$ the income statement for $2027,$ and additional information from the accounting records of Red, Incorporated, are provided below:RED, INCORPORATED Comparative Balance Sheets December $31,2027$ and $2026(\backslash$$ in millions$)$RED$,$ INCORPORATED Income Statement For Year Ended December $31,2027(\backslash$$ in millions$)$ Additional Information from the accounting records: a$.$ During $2027,\backslash (\backslash$$ $233\backslash )$ million of equipment was purchased to replace $\backslash (\backslash$$ $200\backslash )$ million of equipment $(\backslash (95\backslash \%\backslash )$ depreciated$)$ sold at book value. b$.$ In order to maintain the usual policy of paying cash dividends of $\backslash (\backslash$$ $73\backslash )$ million, It was necessary for Red to borrow $\backslash (\backslash$$ $73\backslash )$ million from Its bank. c$.$ Bonds of $\backslash (\backslash$$ $210\backslash )$ million were issued at face amount near the end of $2027.$ Requlred: Prepare the statement of cash flows of Red, Incorporated, for the year ended December $31,2027.$ Present cash flows from operating activitles by the Indirect method. Note: Enter your answers In millions $($l$.$e$.,10,000,000$ should be entered as $10).$ Amounts to be deducted, cash outflows, and any decrease In cash should be indicated with a minus sign. Additional Information from the accounting records:

a$.$ During $2027,\backslash (\backslash$$ $233\backslash )$ million of equipment was purchased to replace $\backslash (\backslash$$ $200\backslash )$ million of equipment $(\backslash (95\backslash \%\backslash )$ depreciated$)$ sold at book value.

b$.$ In order to maintain the usual policy of paying cash dividends of $\backslash (\backslash$$ $73\backslash )$ million, It was necessary for Red to borrow $\backslash (\backslash$$ $73\backslash )$ million from Its bank.

c$.$ Bonds of $\backslash (\backslash$$ $210\backslash )$ million were issued at face amount near the end of $2027.$

Required:

Prepare the statement of cash flows of Red, Incorporated, for the year ended December $31,2027.$ Present cash flows from operating activitles by the Indirect method.

Note: Enter your answers In millions $($l$.$e$.,10,000,000$ should be entered as $10).$ Amounts to be deducted, cash outflows, and any decrease in cash should be indicated with a minus sign.

$\backslash$begin$\{$tabular$\}\{|$l$|$l$|$l$|\}$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$c$|\}\{$RED$,$ INCORPORATED$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$c$|\}\{$Statement of Cash Flows$\}\backslash \backslash$

$\backslash$hline $\backslash$multicolumn$\{3\}\{|$c$|\}\{$For year ended December $31,2027(\backslash$$ in millions$)\}\backslash \backslash$

$\backslash$hline Cash flows from operating activities: & & $\backslash \backslash$

$\backslash$hline Net income & $\backslash$$ $68$ & $\backslash \backslash$

$\backslash$hline Adjustments for noncash income statement items: & & $\backslash \backslash$

$\backslash$hline Depreciation expense & $69$ & $\backslash \backslash$

$\backslash$hline & & $\backslash \backslash$

$\backslash$hline Adjustments for changes in operating assets and operating liabilities: & & $\backslash \backslash$

$\backslash$hline Increase in accounts receivable & $(85)$ & $\backslash \backslash$

$\backslash$hline Increase in prepaid insurance & $(7)$ & $\backslash \backslash$

$\backslash$hline Increase in inventory & $(113)$ & $\backslash \backslash$

$\backslash$hline Decrease in accounts payable & $(16)$ & $\backslash \backslash$

$\backslash$hline Decrease in accrued liabilities & $(2)$ & $\backslash \backslash$

$\backslash$hline & & $\backslash \backslash$

$\backslash$hline Net cash flows from operating activities & & $\backslash$$ $(86)\backslash \backslash$

$\backslash$hline Cash flows from investing activities: & & $\backslash \backslash$

$\backslash$hline Sale of equipment & & $\backslash \backslash$

$\backslash$hline Purchase of equipment & & $\backslash \backslash$

$\backslash$hline & & $\backslash \backslash$

$\backslash$hline Net cash flows from investing