Problem 21-11 (Algo) Prepare a statement of cash flows; direct method [LO21-3, 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. ARDUOUS COMPANY Comparative Balance Sheets December 31, 2021 and 2020 ($ in millions) 2021 2020 Assets Cash Accounts receivable Investment revenue receivable Inventory Prepaid insurance Long-term investment Land Buildings and equipment Less: Accumulated depreciation Patent $ 136 203 19 222 17 195 222 425 (111) 48 $ 1,376 $ 94 220 17 213 25 138 163 426 (146) 50 $ 1,200 $ $ 91 31 17 Liabilities Accounts payable Salaries payable Interest payable (bonds) Income tax payable Deferred tax liability Notes payable Lease liability Bonds payable Less: Discount on bonds Shareholders' Equity Common stock Paid-in capital-excess of par Preferred stock Retained earnings Less: Treasury stock 63 19 21 25 37 30 89 228 (35) 29 21 0 0 301 (41) 469 121 88 243 (22) $ 1,376 423 98 0 230 0 $ 1,200 ARDUOUS COMPANY Income Statement For Year Ended December 31, 2021 ($ in millions) Revenues and gain: Sales revenue $ 535 Investment revenue 25 Gain on sale of Treasury bills 2 $562 Expenses and loss: Cos of goods sold 193 Salaries expense 86 Depreciation expense 13 Amortization expense 2 Insurance expense 20 Interest expense 41 Loss on sale of equipment 32 Income tax expense 49 436 Net income $ 126 Additional information from the accounting records: a. Investment revenue includes Arduous Company's $19 million share of the net income of Demur Company, an equity method investee. b. Treasury bills were sold during 2021 at a gain of $2 million. Arduous Company classifies its investments in Treasury bills as cash equivalents. C. Equipment originally costing $96 million that was one-half depreciated was rendered unusable by a flood. Most major components of the equipment were unharmed and were sold for $16 million. d. Temporary differences between pretax accounting income and taxable income caused the deferred tax liability to increase by $16 million. e. The preferred stock of Tory Corporation was purchased for $38 million as a long-term investment. f. Land costing $59 million was acquired by issuing $29 million cash and a 15%, four-year, $30 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, $95 million. Annual lease payments of $6 million are paid at the beginning of each year starting January 1, 2021. h. $73 million of bonds were retired at maturity i. In February, Arduous issued dividend (9.2 million shares). The market price of the $5 par value common stock was $7.50 per share at that time. Required: Prepare the statement of cash flows of Arduous Company for the year ended December 31, 2021. Present cash flows from operating activities by the direct method. (Do not round your intermediate calculations. Enter your answers in millions (i.e., 10,000,000 should be entered as 10.). Amounts to be deducted should be indicated with a minus sign.) ARDUOUS COMPANY Statement of Cash Flows For year ended December 31, 2021 ($ in millions) Cash flows from operating activities: Cash inflows: Cash outflows: Net cash flows from operating activities Cash flows from investing activities: Cash flows from investing activities: Net cash flows from investing activities Cash flows from financing activities: Net cash flows from financing activities Net increase (decrease) in cash Cash balance, January 1 Cash balance, December 31 Noncash investing and financing activities