Exercise 4-12 Construction of cash flow statement (LO4-5) Holmes Company reported the following balance sheets at December 31, 20X2 and 20X1: ($ in millions) December 31, 20X2 20X1 Cash $ 45 $ 40 Accounts receivable 170 175 Inventory 250 230 Fixed assets 500 400 Accumulated depreciation (150 ) (120 ) Total assets $ 815 $ 725 Accounts payable $ 100 $ 80 Long-term debt 455 425 Common stock 50 50 Retained earnings 280 200 Treasury stock (70 ) (30 ) Total liabilities and stockholders' equity $ 815 $ 725 Its income statement for 20X2 was as follows: ($ in millions) Sales $ 1,000 Cost of sales (670 ) Depreciation (30 ) Other operating expenses (100 ) Income before taxes 200 Income taxes (42 ) Net income $ 158 Additional information: During 20X2, Holmes had the following transactions: Declared and paid a common dividend of $78 million. Purchased additional fixed assets, but did not sell any. Issued $30 million of new debt. Paid interest on all its debt, and included the interest in Other operating expenses. Repurchased common shares, but did not issue any. Required: Prepare a cash flow statement for Holmes for 20X2, using the indirect method to present the operating section. For your calculations, it may be helpful to use the worksheet approach described in the chapter appendix to construct the cash flow statement. (Net cash outflows and amounts to be deducted should be indicated by a minus sign. Enter your answers in millions.)