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 Accounts receivable Inventory Total current assets 46 710 95 651 685 1,441 1,575 812 763 638 Property, plant, and equipment Less accumulated depreciation Net property,plant, and equipment 1,384 1,547 672 875 Total assets 2,204 2,259 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities 274 24 167 163 187 91 79 552 450 409 670 1,002 1,079 Stockholders' equity: Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity_$ 180 180 1,022 1,202 2,204 $ 1,000 1,180 2,259 Burgess Company Income Statement (dollars in millions) Sales $3,910 2,680 1,230 Cost of goods sold Gross margin Selling and administrative expenses 894 Net operating income Nonoperating items: Gain on sale of equipment Income before taxes 336 338 Income taxes 126 Net income $ 212 Burgess also provided the following information: 1. The company sold equipment that had an original cost of $26 million and accumulated depreciation of $14 million. The cash proceeds from the sale were $14 million. The gain on the sale was $2 million. 2. The company did not issue any new bonds during the year. 3. The company paid a cash dividend during the year. 4. The company did not complete any common stock transactions during the year. Required: Using the indirect method, prepare a statement of cash flows for the year. (Enter your answers in millions not in dollars. List any deduction in cash and cash outflows as negative amounts.)
A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company Comparative Balance Sheet (dollars in millions) Ending Balance Beginning Balance Assets Current assets: Cash and cash equivalents Accounts receivable Inventory Total current assets 46 710 95 651 685 1,441 1,575 812 763 638 Property, plant, and equipment Less accumulated depreciation Net property,plant, and equipment 1,384 1,547 672 875 Total assets 2,204 2,259 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities 274 24 167 163 187 91 79 552 450 409 670 1,002 1,079 Stockholders' equity: Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity_$ 180 180 1,022 1,202 2,204 $ 1,000 1,180 2,259 Burgess Company Income Statement (dollars in millions) Sales $3,910 2,680 1,230 Cost of goods sold Gross margin Selling and administrative expenses 894 Net operating income Nonoperating items: Gain on sale of equipment Income before taxes 336 338 Income taxes 126 Net income $ 212 Burgess also provided the following information: 1. The company sold equipment that had an original cost of $26 million and accumulated depreciation of $14 million. The cash proceeds from the sale were $14 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.)
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 55PSA
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What is the statement of
Transcribed Image Text: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
Accounts receivable
46
95
710
651
Inventory
Total current assets
685
638
Property, plant, and equipment
Less accumulated depreciation
Net property,plant, and equipment
1,441
1,575
812
1,384
1,547
672
763
875
Total assets
%24
2,204
2,259
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Accrued liabilities
Income taxes payable
Total current liabilities
Bonds payable
274
167
187
163
91
79
552
409
450
670
Total liabilities
1,002
1,079
Stockholders' equity:
Common stock
180
180
Retained earnings
Total stockholders' equity
1,022
1,202
1,000
1,180
Total liabilities and stockholders' equity $
2,204
2,259
Burgess Company
Income Statement
(dollars in millions)
Sales
$3,910
2,680
1,230
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Nonoperating items:
Gain on sale of cquipment
Income before taxes
894
336
338
Income taxes
126
Net income
$ 212
Burgess also provided the following information:
1. The company sold equipment that had an original cost of $26 million and accumulated depreciation of $14
million. The cash proceeds from the sale were $14 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.)
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