Burgess also provided the following information: The company sold equipment that had an original cost of $13 million and accumulated depreciation of $8 million. The cash proceeds from the sale were $8 million. The gain on the sale was $3 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:1. 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 CompanyComparative Balance Sheet(dollars in millions)EndingBalanceBeginningBalanceAssetsCurrent assets:Cash and cash equivalents49$79Accounts receivable645580Inventory6606151,3541,5157651,2741,466641Total current assetsProperty, plant, and equipmentLess accumulated depreciationNet property, plant, and equipment750825Total assets$ 2,104$ 2,099Liabilities and Stockholders' EquityCurrent liabilities:Accounts payableAccrued liabilitiesIncome taxes payable$2501907615516570Total current liabilities516390Bonds payable450620Total liabilities9661,010Stockholders' equity:Common stock161977161928Retained earningsTotal stockholders' equity1,138$ 2,1041,089$ 2,099Total liabilities and stockholders' equityBurgess CompanyIncome Statement(dollars in millions)$ 3,6002,5501,050SalesCost of goods soldGross marginSelling and administrative expensesNet operating incomeNonoperating items:Gain on sale of equipment8751753Income before taxes17863Income taxesNet income$115 Burgess CompanyStatement of Cash FlowsOperating activities:Investing activities:Financing activities:Beginning cash and cash equivalentsEnding cash and cash equivalents

Cash flow statement is a statement which determine the cash flow from operating financial and…

Answered: that had an original cost of $13…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Burgess also provided the following information:

The company sold equipment that had an original cost of $13 million and accumulated depreciation of $8 million. The cash proceeds from the sale were $8 million. The gain on the sale was $3 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:

1. 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
49
$
79
Accounts receivable
645
580
Inventory
660
615
1,354
1,515
765
1,274
1,466
641
Total current assets
Property, plant, and equipment
Less accumulated depreciation
Net property, plant, and equipment
750
825
Total assets
$ 2,104
$ 2,099
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Accrued liabilities
Income taxes payable
$
250
190
76
155
165
70
Total current liabilities
516
390
Bonds payable
450
620
Total liabilities
966
1,010
Stockholders' equity:
Common stock
161
977
161
928
Retained earnings
Total stockholders' equity
1,138
$ 2,104
1,089
$ 2,099
Total liabilities and stockholders' equity
Burgess Company
Income Statement
(dollars in millions)
$ 3,600
2,550
1,050
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Nonoperating items:
Gain on sale of equipment
875
175
3
Income before taxes
178
63
Income taxes
Net income
$
115

Burgess Company
Statement of Cash Flows
Operating activities:
Investing activities:
Financing activities:
Beginning cash and cash equivalents
Ending cash and cash equivalents

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 5 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions