Problem 21-11 Prepare a statement of cash flows; direct method [LO21-3, 21-8] The comparative balance sheets for 2016 and 2015 and the income statement for 2016 are given below for Arduous Company. Additional information from Arduouss accounting records is provided also.

Additional information from the accounting records:
a.	Investment revenue includes Arduous Companys $22 million share of the net income of Demur Company, an equity method investee.
b.	Treasury bills were sold during 2016 at a gain of $2 million. Arduous Company classifies its investments in Treasury bills as cash equivalents.
c.	A machine originally costing $102 million that was one-half depreciated was rendered unusable by a flood. Most major components of the machine were unharmed and were sold for $22 million.
d.	Temporary differences between pretax accounting income and taxable income caused the deferred income tax liability to increase by $19 million.
e.	The preferred stock of Tory Corporation was purchased for $41 million as a long-term investment.
f.	Land costing $62 million was acquired by issuing $31 million cash and a 12%, four-year, $31 million note payable to the seller.
g.	The right to use a building was acquired with a 15-year lease agreement; present value of lease payments, $98 million.
h.	$76 million of bonds were retired at maturity.
i.	In February, Arduous issued a 5% stock dividend (4 million shares). The market price of the $5 par value common stock was $7.50 per share at that time. Also the company paid a cash dividend.
j.	In April, 1 million shares of common stock were repurchased as treasury stock at a cost of $25.00 million.

Required:

Prepare the statement of cash flows of Arduous Company for the year ended December 31, 2016. 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.)

ARDUOUS COMPANY Comparative Balance Sheets December 31, 2016 and 2015 in millions) 2016 2015 Assets 148 97 Cash Accounts receivable 206 226 Investment revenue receivable 22 20 nventory 221 216 Prepaid insurance 20 29 Long-term investment 204 141 Land 228 166 Buildings and equipment 428 432 Less: Accumulated depreciation (112) (152 Patent 49 51 1,414 1,226 Liabilities 66 97 Accounts payable Salaries payable 22 Bond interest payable 24 20 Income tax payable 28 31 Deferred income tax liability 43 24 Notes payable 31 Lease liability 98 Bonds payable 231 307 Less: Discount on bonds (38) (44) Shareholders' Equity Common stock 446 426 Paid-in capital excess of par 101 Preferred stock 91 Retained earnings 286 230 Less: Treasury stock (25) 1,414 $1,226 ARDUOUS COMPANY Income Statement For Year Ended December 31, 2016 in millions) Revenues Sales revenue 554 Investment revenue 27 Gain on sale of treasury bills 2 $583 Expenses and loss: Cost of goods sold 196 Salaries expense 89 Depreciation expense 11 Patent amortization expense 23 Insurance expense Bond interest expense Loss on machine damage 29 52 446 ncome tax expense Net income $137