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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 | $ | 49 | $ | 79 |
Accounts receivable | 645 | 580 | ||
Inventory | 660 | 615 | ||
Total current assets | 1,354 | 1,274 | ||
Property, plant, and equipment | 1,515 | 1,466 | ||
Less accumulated depreciation | 765 | 641 | ||
Net property,plant, and equipment | 750 | 825 | ||
Total assets | $ | 2,104 | $ | 2,099 |
Liabilities and Stockholders' Equity | ||||
Current liabilities: | ||||
Accounts payable | $ | 250 | $ | 155 |
Accrued liabilities | 190 | 165 | ||
Income taxes payable | 76 | 70 | ||
Total current liabilities | 516 | 390 | ||
Bonds payable | 450 | 620 | ||
Total liabilities | 966 | 1,010 | ||
Stockholders' equity: | ||||
Common stock | 161 | 161 | ||
Retained earnings | 977 | 928 | ||
Total stockholders' equity | 1,138 | 1,089 | ||
Total liabilities and stockholders' equity | $ | 2,104 | $ | 2,099 |
Burgess Company Income Statement (dollars in millions) | ||
Sales | $ | 3,600 |
Cost of goods sold | 2,550 | |
Gross margin | 1,050 | |
Selling and administrative expenses | 875 | |
Net operating income | 175 | |
Nonoperating items: Gain on sale of equipment | 3 | |
Income before taxes | 178 | |
Income taxes | 63 | |
Net income | $ | 115 |
Burgess also provided the following information: |
1. | The company sold equipment that had an original cost of $13 million and accumulated depreciation of $8 million. The cash proceeds from the sale were $8 million. The gain on the sale was $3 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.) |
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