The comparative balance sheets for 2018 and 2017 are given below for Surmise Company. Net income for 2018 was $50 million.

Required:
Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2018. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for changes in some account balances. A spreadsheet or T-account analysis will be helpful. (Hint: The right to use a building was acquired with a seven-year lease agreement. Annual lease payments of $9 million are paid at January 1 of each year starting in 2018.)

SURMISE COMPANY Comparative Balance Sheets December 21, 2018 and 2017 S in millions) 2018 2017 Assets Cash s 36 92 (12) $ 40 96 Less: Allowance for uncollectible accounts Prepaid expenses Inventory Long-term investment Land Buildings and equipment 145 80 100 420 130 40 100 300 (120) Less: Accumulated depreciation Patent 16 $743 17 $ 604 Llabilitles Accounts payable Accrued liabilities Notes payable Lease liability Bonds payable Shareholders' Equity Common stock Paid-in capital-excess of par Retained eamings $ 13 35 65 s 32 10 Ci Ci 125 60 245 212 50 205 182 $743 $ 604