Problem $21-11($Algo$)$ Prepare a statement of cash flows; direct method $[$LO$21-3,21-8]$

The comparative balance sheets for $2021$ and $2020$ and the income statement for $2021$ are given below for Arduous Company. Additional information from Arduous$$s accounting records is provided also.

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ARDUOUS COMPANY

Comparative Balance Sheets

December $31,2021$ and $2020$

$($$ in millions$)20212020$Assets$$Cash$$138$$$96$Accounts receivable$205224$Investment revenue receivable$2319$Inventory$222215$Prepaid insurance$2128$Long$-$term investment$203140$Land$226165$Buildings and equipment$427430$Less: Accumulated depreciation$(109)(150)$Patent$4347$$$1,399$$$1,214$Liabilities$$Accounts payable$$65$$$95$Salaries payable$2333$Interest payable $($bonds$)2519$Income tax payable$2732$Deferred tax liability$4123$Notes payable$310$Lease liability$890$Bonds payable$230305$Less: Discount on bonds$(37)(46)$Shareholders$$ Equity$$Common stock$475425$Paid$-$in capital$$excess of par$125100$Preferred stock$900$Retained earnings$239228$Less: Treasury stock$(24)0$$$1,399$$$1,214$

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ARDUOUS COMPANY

Income Statement

For Year Ended December $31,2021$

$($$ in millions$)$Revenues and gain:$$Sales revenue$$557$Investment revenue$28$Gain on sale of Treasury bills$4$$$589$Expenses and loss:$$Cost of goods sold$195$Salaries expense$88$Depreciation expense$9$Amortization expense$4$Insurance expense$22$Interest expense$43$Loss on sale of equipment$30$Income tax expense$51442$Net income$$$$147$

Additional information from the accounting records:

Investment revenue includes Arduous Company$$s $$23$ million share of the net income of Demur Company, an equity method investee.

Treasury bills were sold during $2021$ at a gain of $$4$ million. Arduous Company classifies its investments in Treasury bills as cash equivalents.

Equipment originally costing $$100$ million that was one$-$half depreciated was rendered unusable by a flood. Most major components of the equipment were unharmed and were sold for $$20$ million.

Temporary differences between pretax accounting income and taxable income caused the deferred tax liability to increase by $$18$ million.

The preferred stock of Tory Corporation was purchased for $$40$ million as a long$-$term investment.

Land costing $$61$ million was acquired by issuing $$30$ million cash and a $14\%,$ four$-$year, $$31$ million note payable to the seller.

The right to use a building was acquired with a $15-$year lease agreement; present value of lease payments, $$97$ million. Annual lease payments of $$8$ million are paid at the beginning of each year starting January $1,2021.$

$$75$ million of bonds were retired at maturity.

In February, Arduous issued dividend $(10\mathrm{.}0$ million shares$).$ The market price of the $$5$ par value common stock was $$7\mathrm{.}50$ per share at that time.

In April, $1$ million shares of common stock were repurchased as treasury stock at a cost of $$24\mathrm{.}00$ million.

Required:

Prepare the statement of cash flows of Arduous Company for the year ended December $31,2021.$ Present cash flows from operating activities by the direct method. $($Do not round your intermediate calculations. 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.$)$ Required:

Prepare the statement of cash flows of Arduous Company for the year ended December $31,2021.$ Present cash flows from ope activities by the direct method. $($Do not round your intermediate calculations. Enter your answers in millions $($i$.$e$.,10,000,000$ be entered as $10.).$ Amounts to be deducted should be indicated with a minus sign.$)$