Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company Comparative Balance Sheet (dollars in millions) Ending Balance Beginning
A comparative balance sheet and an income statement for Burgess Company are given below:
Burgess Company Comparative Balance Sheet (dollars in millions) Ending Balance Beginning Balance Assets Current assets: Cash and cash equivalents $ 58 $ 119 Accounts receivable 830 759 Inventory 745 686 Total current assets 1,633 1,564 Property, plant, and equipment 1,695 1,655 Less accumulated depreciation 884 708 Net property,plant, and equipment 811 947 Total assets $ 2,444 $ 2,511 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 298 $ 179 Accrued liabilities 199 151 Income taxes payable 115 91 Total current liabilities 612 421 Bonds payable 510 790 Total liabilities 1,122 1,211 Stockholders' equity: Common stock 240 240 Retained earnings 1,082 1,060 Total stockholders' equity 1,322 1,300 Total liabilities and stockholders' equity $ 2,444 $ 2,511
Burgess Company Income Statement (dollars in millions) Sales $ 4,270 Cost of goods sold 2,920 Gross margin 1,350 Selling and administrative expenses 918 Net operating income 432 Nonoperating items: Gain on sale of equipment 2 Income before taxes 434 Income taxes 150 Net income $ 284
Burgess also provided the following information:
- The company sold equipment that had an original cost of $50 million and accumulated depreciation of $26 million. The cash proceeds from the sale were $26 million. The gain on the sale was $2 million.
The company did not issue any new bonds during the year.
The company paid a cash dividend during the year.
The company did not complete any common stock transactions during the year.
Required:
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 0 0 Investing activities 0 Financing activities: 0 Beginning cash and cash equivalents Ending cash and cash equivalents $
A comparative balance sheet and an income statement for Burgess Company are given below:
Burgess Company Comparative Balance Sheet (dollars in millions) | |||||
Ending Balance | Beginning Balance | ||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 58 | $ | 119 | |
Accounts receivable | 830 | 759 | |||
Inventory | 745 | 686 | |||
Total current assets | 1,633 | 1,564 | |||
Property, plant, and equipment | 1,695 | 1,655 | |||
Less accumulated depreciation | 884 | 708 | |||
Net property,plant, and equipment | 811 | 947 | |||
Total assets | $ | 2,444 | $ | 2,511 | |
Liabilities and Stockholders' Equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 298 | $ | 179 | |
Accrued liabilities | 199 | 151 | |||
Income taxes payable | 115 | 91 | |||
Total current liabilities | 612 | 421 | |||
Bonds payable | 510 | 790 | |||
Total liabilities | 1,122 | 1,211 | |||
Stockholders' equity: | |||||
Common stock | 240 | 240 | |||
Retained earnings | 1,082 | 1,060 | |||
Total stockholders' equity | 1,322 | 1,300 | |||
Total liabilities and stockholders' equity | $ | 2,444 | $ | 2,511 | |
Burgess Company Income Statement (dollars in millions) | ||
Sales | $ | 4,270 |
Cost of goods sold | 2,920 | |
Gross margin | 1,350 | |
Selling and administrative expenses | 918 | |
Net operating income | 432 | |
Nonoperating items: | ||
Gain on sale of equipment | 2 | |
Income before taxes | 434 | |
Income taxes | 150 | |
Net income | $ | 284 |
Burgess also provided the following information:
- The company sold equipment that had an original cost of $50 million and accumulated depreciation of $26 million. The cash proceeds from the sale were $26 million. The gain on the sale was $2 million.
The company did not issue any new bonds during the year.
The company paid a cash dividend during the year.
The company did not complete any common stock transactions during the year.
Required:
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.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started