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Problem 13-12 Prepare a Statement of Cash Flows [LO13-1, LO13-2] A comparative balance sheet and an income statement for Burgess Company are given below: Burgess

Problem 13-12 Prepare a Statement of Cash Flows [LO13-1, LO13-2]

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 $ 64 $ 131
Accounts receivable 890 813
Inventory 775 710
Total current assets 1,729 1,654
Property, plant, and equipment 1,755 1,709
Less accumulated depreciation 920 726
Net property, plant, and equipment 835 983
Total assets $ 2,564 $ 2,637
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 310 $ 185
Accrued liabilities 205 145
Income taxes payable 127 97
Total current liabilities 642 427
Bonds payable 540 850
Total liabilities 1,182 1,277
Stockholders' equity:
Common stock 270 270
Retained earnings 1,112 1,090
Total stockholders' equity 1,382 1,360
Total liabilities and stockholders' equity $ 2,564 $ 2,637

Burgess Company Income Statement (dollars in millions)
Sales $ 4,450
Cost of goods sold 3,040
Gross margin 1,410
Selling and administrative expenses 930
Net operating income 480
Nonoperating items:
Gain on sale of equipment 2
Income before taxes 482
Income taxes 162
Net income $ 320

Burgess also provided the following information:

  1. The company sold equipment that had an original cost of $62 million and accumulated depreciation of $32 million. The cash proceeds from the sale were $32 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.

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