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 $ 55 $ 113 Accounts receivable 800 732 Inventory 730 674 Total current assets 1,585 1,519 Property, plant, and equipment 1,665 1,628 Less accumulated depreciation 866 699 Net property,plant, and equipment 799 929 Total assets $ 2,384 $ 2,448 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 292 $ 176 Accrued liabilities 196 154 Income taxes payable 109 88 Total current liabilities 597 418 Bonds payable 495 760 Total liabilities 1,092 1,178 Stockholders' equity: Common stock 225 225 Retained earnings 1,067 1,045 Total stockholders' equity 1,292 1,270 Total liabilities and stockholders' equity $ 2,384 $ 2,448 Burgess Company Income Statement (dollars in millions) Sales $ 4,180 Cost of goods sold 2,860 Gross margin 1,320 Selling and administrative expenses 912 Net operating income 408 Nonoperating items: Gain on sale of equipment 2 Income before taxes 410 Income taxes 144 Net income $ 266 Burgess also provided the following information: The company sold equipment that had an original cost of $44 million and accumulated depreciation of $23 million. The cash proceeds from the sale were $23 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: Using the indirect method, prepare a statement of cash flows for the year. Please enter in millions not in dollars.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A comparative balance sheet and an income statement for Burgess Company are given below:

	Ending Balance	Beginning Balance
Burgess Company Comparative Balance Sheet (dollars in millions)
Assets
Current assets:
Cash and cash equivalents	$ 55	$ 113
Accounts receivable	800	732
Inventory	730	674
Total current assets	1,585	1,519
Property, plant, and equipment	1,665	1,628
Less accumulated depreciation	866	699
Net property,plant, and equipment	799	929
Total assets	$ 2,384	$ 2,448
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$ 292	$ 176
Accrued liabilities	196	154
Income taxes payable	109	88
Total current liabilities	597	418
Bonds payable	495	760
Total liabilities	1,092	1,178
Stockholders' equity:
Common stock	225	225
Retained earnings	1,067	1,045
Total stockholders' equity	1,292	1,270
Total liabilities and stockholders' equity	$ 2,384	$ 2,448

Burgess Company Income Statement (dollars in millions)
Sales	$ 4,180
Cost of goods sold	2,860
Gross margin	1,320
Selling and administrative expenses	912
Net operating income	408
Nonoperating items:
Gain on sale of equipment	2
Income before taxes	410
Income taxes	144
Net income	$ 266

Burgess also provided the following information:

The company sold equipment that had an original cost of $44 million and accumulated depreciation of $23 million. The cash proceeds from the sale were $23 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:

Using the indirect method, prepare a statement of cash flows for the year.

Please enter in millions not in dollars.

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