Question

he comparative balance sheets for 2016 and 2015 and the incomestatement for 2016 are given below for Arduous Company. Additionalinformation from Arduous’s accounting records is provided also.

ARDUOUS COMPANY Comparative Balance Sheets December 31, 2016 and 2015 ($ in millions)
	2016		2015
Assets
Cash	$	154	$	100
Accountsreceivable		209		232
Investment revenuereceivable		25		23
Inventory		226		219
Prepaidinsurance		23		32
Long-terminvestment		213		144
Land		234		169
Buildings andequipment		431		438
Less: Accumulateddepreciation		(117)		(158)
Patent		53		56
	$	1,451	$	1,255
Liabilities
Accountspayable	$	69	$	103
Salariespayable		25		37
Bond interestpayable		27		23
Income taxpayable		31		38
Deferred income taxliability		49		27
Notes payable		32		0
Lease liability		101		0
Bonds payable		234		313
Less: Discount onbonds		(41)		(46)
Shareholders’ Equity
Common stock		465		429
Paid-incapital—excess of par		119		104
Preferred stock		94		0
Retainedearnings		274		227
Less: Treasury stock		(28)		0
	$	1,451	$	1,255

ARDUOUS COMPANY Income Statement For Year Ended December 31, 2016 ($ in millions)
Revenues
Sales revenue			$	589
Investmentrevenue				30
Gain on sale oftreasury bills				2	$	621
Expenses andloss:
Cost of goodssold				199
Salariesexpense				92
Depreciationexpense				13
Patent amortizationexpense				2
Insuranceexpense				26
Bond interestexpense				47
Loss on machinedamage				34
Income taxexpense				55		468
Netincome					$	153

Additionalinformation from the accounting records:
a.	Investment revenue includes Arduous Company’s $25 million shareof 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 ascash equivalents.
c.	A machine originally costing $108 million that was one-halfdepreciated was rendered unusable by a flood. Most major componentsof the machine were unharmed and were sold for $20 million.
d.	Temporary differences between pretax accounting income andtaxable income caused the deferred income tax liability to increaseby $22 million.
e.	The preferred stock of Tory Corporation was purchased for $44million as a long-term investment.
f.	Land costing $65 million was acquired by issuing $33 millioncash and a 10%, four-year, $32 million note payable to theseller.
g.	The right to use a building was acquired with a 15-year leaseagreement; present value of lease payments, $101 million.
h.	$79 million of bonds wereretired at maturity.
i.	In February, Arduous issued a 4% stock dividend (6 millionshares). The market price of the $6 par value common stock was$8.50 per share at that time. Also the company paid a cashdividend.
j.	In April, 1 million shares ofcommon stock were repurchased as treasury stock at a cost of $28.00million.

Required:

Prepare the statement of cash flows of Arduous Company for theyear ended December 31, 2016. Present cash flows from operatingactivities by the direct method. (Do not round yourintermediate calculations. Enter your answers in millions (i.e.,10,000,000 should be entered as 10.). Amounts to be deducted shouldbe indicated with a minus sign.)