Answered step by step
Verified Expert Solution
Link Copied!

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 $ 67 $ 137
Accounts receivable 920 840
Inventory 790 722
Total current assets 1,777 1,699
Property, plant, and equipment 1,785 1,736
Less accumulated depreciation 938 735
Net property,plant, and equipment 847 1,001
Total assets $ 2,624 $ 2,700
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 316 $ 188
Accrued liabilities 208 142
Income taxes payable 133 100
Total current liabilities 657 430
Bonds payable 555 880
Total liabilities 1,212 1,310
Stockholders' equity:
Common stock 285 285
Retained earnings 1,127 1,105
Total stockholders' equity 1,412 1,390
Total liabilities and stockholders' equity $ 2,624 $ 2,700
Burgess Company Income Statement (dollars in millions)
Sales $ 4,540
Cost of goods sold 3,100
Gross margin 1,440
Selling and administrative expenses 936
Net operating income 504
Nonoperating items: Gain on sale of equipment 2
Income before taxes 506
Income taxes 168
Net income $ 338

Burgess also provided the following information:

1.

The company sold equipment that had an original cost of $68 million and accumulated depreciation of $35 million. The cash proceeds from the sale were $35 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

Burgess Company Statement of Cash Flows - Indirect Method Operating activities: Adjustments to convert net income to cash basis: Investing activities: Financing activities: Beginning cash and cash equivalents Ending cash and cash equivalents ng cash and cash equiva

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Environmental Auditing For The Non Specialist The CHGL Series On The Environment

Authors: Chris Hoggart

1st Edition

1902423704, 978-1902423708

More Books

Students also viewed these Accounting questions

Question

I receive useful feedback about my performance.

Answered: 1 week ago

Question

I am encouraged to offer opinions/suggestions.

Answered: 1 week ago