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Comparative balance sheets for 2021 and 2020, a statement of income for 2021, and additional information from the accounting records of Red, Inc., are provided below.

RED, INC. Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions)
	2021				2020
Assets
Cash	$	40			$	148
Accounts receivable		200				148
Prepaid insurance		12				9
Inventory		300				191
Buildings and equipment		432				366
Less: Accumulated depreciation		(135	)			(256	)
	$	849			$	606
Liabilities
Accounts payable	$	103			$	132
Accrued liabilities		11				19
Notes payable		76				0
Bonds payable		189				0
Shareholders Equity
Common stock		416				416
Retained earnings		54				39
	$	849			$	606

RED, INC. Statement of Income For Year Ended December 31, 2021
($ in millions)
Revenues
Sales revenue				$	2,200
Expenses
Cost of goods sold	$	1,467
Depreciation expense		41
Operating expenses		601			2,109
Net income				$	91

Additional information from the accounting records:

1. During 2021, $246 million of equipment was purchased to replace $180 million of equipment (90% depreciated) sold at book value.
2. In order to maintain the usual policy of paying cash dividends of $76 million, it was necessary for Red to borrow $76 million from its bank.

Required: Prepare the statement of cash flows for Red, Inc., using the indirect method to report operating activities. (Amounts to be deducted should be indicated with a minus sign. Enter your answers in millions (i.e., 10,000,000 should be entered as 10).)

RED, INC. Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Net income $ 2,148 Adjustments for noncash effects: Depreciation expense Changes in operating assets and liabilities: 2,148 Net cash flows from operating activities Cash flows from investing activities: Purchase of equipment Sale of equipment (246) 18 (228) Net cash flows from investing activities Cash flows from financing activities: Issuance of note payable Issuance of bonds payable Payment of dividends 76 189 (76) 189 2,109 Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance. December 31 148 $ 2.257

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