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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:
- 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.
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The company did not issue any new bonds during the year.
-
The company paid a cash dividend during the year.
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The company did not complete any common stock transactions during the year.
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