Using the indirect method, prepare a statement of cash flows. ote: Enter your answers in millions not in dollars List any deduction in cash a
Using the indirect method, prepare a statement of cash flows. ote: Enter your answers in millions not in dollars List any deduction in cash a
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Problem 15-19 (Static) Prepare a Statement of Cash Flows [LO15-1, LO15-2, LO15-3, LO15-4, LO15-5]
A comparative balance sheet and an income statement for Burgess Company are given below:
Burgess Company
Comparative Balance Sheet
(dollars in millions)
Assets
Current assets:
Cash and cash equivalents
Accounts receivable
Inventory
Total current assets.
Property, plant, and equipment
Less accumulated depreciation
Net property, plant, and equipment.
Total assets
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Accrued liabilities
Income taxes payable
Total current liabilities.
Bonds payable
Total liabilities
Stockholders' equity:
Common stock
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
Burgess Company
Income Statement
(dollars in millions)
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Nonoperating items:
Gain on sale of equipment
Income before taxes
Income taxes
Net income
**
$3,600
2,550
1,050
875
175
178
63
$115
Ending
Balance
$ 49
645
660
1,354
1,515
765
750
$ 2,104
$250
190
76
516
450
966
161
977
1,138
$ 2,104
Beginning
Balance
$ 79
580
615
1,274
1,466
641
825
$ 2,099
$ 155
165
70
390
620
1,010
161
928
1,089
$ 2,099](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F01105c61-16b2-4ed7-8b58-345531cf6846%2F53acbcba-3cf6-4c0f-a6bc-a9c5f767a089%2Felgdff4_processed.png&w=3840&q=75)
Transcribed Image Text:Problem 15-19 (Static) Prepare a Statement of Cash Flows [LO15-1, LO15-2, LO15-3, LO15-4, LO15-5]
A comparative balance sheet and an income statement for Burgess Company are given below:
Burgess Company
Comparative Balance Sheet
(dollars in millions)
Assets
Current assets:
Cash and cash equivalents
Accounts receivable
Inventory
Total current assets.
Property, plant, and equipment
Less accumulated depreciation
Net property, plant, and equipment.
Total assets
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
Accrued liabilities
Income taxes payable
Total current liabilities.
Bonds payable
Total liabilities
Stockholders' equity:
Common stock
Retained earnings
Total stockholders' equity
Total liabilities and stockholders' equity
Burgess Company
Income Statement
(dollars in millions)
Sales
Cost of goods sold
Gross margin
Selling and administrative expenses
Net operating income
Nonoperating items:
Gain on sale of equipment
Income before taxes
Income taxes
Net income
**
$3,600
2,550
1,050
875
175
178
63
$115
Ending
Balance
$ 49
645
660
1,354
1,515
765
750
$ 2,104
$250
190
76
516
450
966
161
977
1,138
$ 2,104
Beginning
Balance
$ 79
580
615
1,274
1,466
641
825
$ 2,099
$ 155
165
70
390
620
1,010
161
928
1,089
$ 2,099

Transcribed Image Text:Burgess also provided the following information:
1. The company sold equipment for $8 million that originally cost $13 million with accumulated depreciation of $8 million. The gain on
the sale was $3 million.
2. The company did not issue any new bonds, pay a dividend, or complete any common stock transactions during the year.
Required:
1. Using the indirect method, prepare a statement of cash flows.
Note: Enter your answers in millions not in dollars. List any deduction in cash and cash outflows as negative amounts.
Operating activities:
Investing activities:
Financing activities:
Burgess Company
Statement of Cash Flows
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