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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

FINANCIAL ACCOUNTING
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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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: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
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
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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