Problem $13-12($Algo$)$ Prepare a Statement of Cash Flows $[$LO$13-1,$ LO$13-2]$

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 $ $49$ $ $101$

Accounts receivable $740678$

Inventory $700650$

Total current assets $1,4891,429$

Property, plant, and equipment $1,6051,574$

Less accumulated depreciation $830681$

Net property,plant, and equipment $775893$

Total assets $ $2,264$ $ $2,322$

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ $280$ $ $170$

Accrued liabilities $190160$

Income taxes payable $9782$

Total current liabilities $567412$

Bonds payable $465700$

Total liabilities $1,0321,112$

Stockholders' equity:

Common stock $195195$

Retained earnings $1,0371,015$

Total stockholders' equity $1,2321,210$

Total liabilities and stockholders' equity $ $2,264$ $ $2,322$

Burgess Company

Income Statement

$($dollars in millions$)$

Sales $ $4,000$

Cost of goods sold $2,740$

Gross margin $1,260$

Selling and administrative expenses $900$

Net operating income $360$

Nonoperating items:

Gain on sale of equipment $2$

Income before taxes $362$

Income taxes $132$

Net income $ $230$

Burgess also provided the following information:

The company sold equipment that had an original cost of $$32$ million and accumulated depreciation of $$17$ million. The cash proceeds from the sale were $$17$ million. The gain on the sale was $$2$ million.

The company did not issue any new bonds during the year.

The company paid a cash dividend during the year.

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.$)$