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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 | $ | 46 | $ | 95 |
Accounts receivable | 710 | 651 | ||
Inventory | 685 | 638 | ||
Total current assets | 1,441 | 1,384 | ||
Property, plant, and equipment | 1,575 | 1,547 | ||
Less accumulated depreciation | 812 | 672 | ||
Net property,plant, and equipment | 763 | 875 | ||
Total assets | $ | 2,204 | $ | 2,259 |
Liabilities and Stockholders' Equity | ||||
Current liabilities: | ||||
Accounts payable | $ | 274 | $ | 167 |
Accrued liabilities | 187 | 163 | ||
Income taxes payable | 91 | 79 | ||
Total current liabilities | 552 | 409 | ||
Bonds payable | 450 | 670 | ||
Total liabilities | 1,002 | 1,079 | ||
Stockholders' equity: | ||||
Common stock | 180 | 180 | ||
Retained earnings | 1,022 | 1,000 | ||
Total stockholders' equity | 1,202 | 1,180 | ||
Total liabilities and stockholders' equity | $ | 2,204 | $ | 2,259 |
Burgess Company Income Statement (dollars in millions) | ||
Sales | $ | 3,910 |
Cost of goods sold | 2,680 | |
Gross margin | 1,230 | |
Selling and administrative expenses | 894 | |
Net operating income | 336 | |
Nonoperating items: Gain on sale of equipment | 2 | |
Income before taxes | 338 | |
Income taxes | 126 | |
Net income | $ | 212 |
Burgess also provided the following information: |
1. | The company sold equipment that had an original cost of $26 million and accumulated depreciation of $14 million. The cash proceeds from the sale were $14 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.) |
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