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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 $ 62 $ 127
Accounts receivable 870 795
Inventory 765 702
Total current assets 1,697 1,624
Property, plant, and equipment 1,735 1,691
Less accumulated depreciation 908 720
Net property,plant, and equipment 827 971
Total assets $ 2,524 $ 2,595
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 306 $ 183
Accrued liabilities 203 147
Income taxes payable 123 95
Total current liabilities 632 425
Bonds payable 530 830
Total liabilities 1,162 1,255
Stockholders' equity:
Common stock 260 260
Retained earnings 1,102 1,080
Total stockholders' equity 1,362 1,340
Total liabilities and stockholders' equity $ 2,524 $ 2,595
Burgess Company Income Statement (dollars in millions)
Sales $ 4,390
Cost of goods sold 3,000
Gross margin 1,390
Selling and administrative expenses 926
Net operating income 464
Nonoperating items: Gain on sale of equipment 2
Income before taxes 466
Income taxes 158
Net income $ 308

Burgess also provided the following information:

1.

The company sold equipment that had an original cost of $58 million and accumulated depreciation of $30 million. The cash proceeds from the sale were $30 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.)

image text in transcribed

Operating activities Net income Adjustments to convert net income to cash basis Depreciation Increase in accounts receivable Increase in inventory Increase in accounts payable Increase in accrued liabilities Increase in income taxes payable Gain on sale of equipment Net cash provided by operating activities Investing activities Proceeds from sale of equipment Additions to plant and equipment Net cash used in investing activities Financing activities Retirement of bonds payable Cash dividends Net cash used in financing activities Net decrease in cash Beginning cash and cash equivalents Ending cash and cash equivalents

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