The comparative balance sheets for 2018 and 2017 are given below for Surmise Company.

Net income for 2018 was $80 million.

SURMISE COMPANY Comparative Balance Sheets December 31, 2018 and 2017 ($ in millions)


2018 2017
Assets
Cash 55 58
Accounts receivable 89 106
Less: allowance for uncontrollable accounts (24) (4)
Prepaid expenses 19 16
Inventory 132 110
Long-term investment 89 50
Land 98 98
Buildings and equipment 400 270
Less accumulated depreciation (137) (108)
Patent 25 26
746 622

Liabilities
Accounts payable 19 42
Accrued liabilities 4 20
Notes payable 48 0
Lease liability 122 0
Bonds payable 64 132
Shareholders equity
Common stock 69 50
Paid-in capital-excess of par 261 205
Retained earnings 159 173
746 622

Required:
Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2021. 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 $10 million are paid at January 1 of each year starting in 2021.) (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.)