Problem 15-12 (Algo) Prepare a Statement of Cash Flows [LO15-1, LO15-2]

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.

Required:

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.)