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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 | $ | 56 | $ | 115 |
Accounts receivable | 810 | 741 | ||
Inventory | 735 | 678 | ||
Total current assets | 1,601 | 1,534 | ||
Property, plant, and equipment | 1,675 | 1,637 | ||
Less accumulated depreciation | 872 | 702 | ||
Net property,plant, and equipment | 803 | 935 | ||
Total assets | $ | 2,404 | $ | 2,469 |
Liabilities and Stockholders' Equity | ||||
Current liabilities: | ||||
Accounts payable | $ | 294 | $ | 177 |
Accrued liabilities | 197 | 153 | ||
Income taxes payable | 111 | 89 | ||
Total current liabilities | 602 | 419 | ||
Bonds payable | 500 | 770 | ||
Total liabilities | 1,102 | 1,189 | ||
Stockholders' equity: | ||||
Common stock | 230 | 230 | ||
Retained earnings | 1,072 | 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 | $ | 4,210 |
Cost of goods sold | 2,880 | |
Gross margin | 1,330 | |
Selling and administrative expenses | 914 | |
Net operating income | 416 | |
Nonoperating items: Gain on sale of equipment | 2 | |
Income before taxes | 418 | |
Income taxes | 146 | |
Net income | $ | 272 |
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.) |
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