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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 | $ | 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.)
|
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
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