| A comparative balance sheet and an income statement for Burgess Company are given below: |
A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company Comparative Balance Sheet (dollars in millions) Ending Beginning Balance Balance Assets Current assets: Cash and cash equivalents $ 56 $ 115 Accounts receivable 810 741 Inventory 735 678 Total current assets 1,601 1,534 Property, plant, and equipment Less accumulated depreciation 1,675 872 1,637 702 Net property.plant, and equipment 803 935 Total assets $2,404 $2,469 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Income taxes payable $ 294 $ 197 111 177 153 89 Total current liabilities Bonds payable 602 500 419 770 Total liabilities 1,102 1,189 Stockholders' equity: Common stock Retained earnings 230 1,072 230 1,050 Total stockholders' equity 1,302 1,280 Total liabilities and stockholders' equity $2,404 $ 2,469 Burgess Company Income Statement (dollars in millions) Sales Cost of goods sold $ 4,210 2,880 Gross margin Selling and administrative expenses 1,330 914 416 Net operating income Nonoperating items: Gain on sale of equipment 2 Income before taxes Income taxes 418 146 Net income $ 272 Burgess also provided the following information: Burgess also provided the following information: 1. The company sold equipment that had an original cost of $46 million and accumulated depreciation of $24 million. The cash proceeds from the sale were $24 million. The gain on the sale was $2 million. 2. The company did not issue any new bonds during the year. 3. The company paid a cash dividend during the year. 4. The company did not complete any common stock transactions during the year. Required: 1. Using the indirect method, prepare a statement of cash flows for the year. (Enter your answers in millions not in dollars. List any deduction in cash and cash outflows as negative amounts.) Burgess Company Statement of Cash Flows Operating activities: Net income Adjustments to convert net income to cash basis: $ 272 0 272 Investing activities: Investing activities: 0 Financing activities: 0 272 Beginning cash and cash equivalents Ending cash and cash equivalents $ 272
