Problem 13-12 Prepare a Statement of Cash Flows [LO13-1, LO13-2]
A comparative balance sheet and an income statement for Burgess Company are given below:
Burgess Company Comparative Balance Sheet (dollars in millions) |
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Ending Balance | Beginning Balance | ||||
Assets | |||||
Current assets: | |||||
Cash and cash equivalents | $ | 52 | $ | 107 | |
Accounts receivable | 770 | 705 | |||
Inventory | 715 | 662 | |||
Total current assets | 1,537 | 1,474 | |||
Property, plant, and equipment | 1,635 | 1,601 | |||
Less accumulated depreciation | 848 | 690 | |||
Net property, plant, and equipment | 787 | 911 | |||
Total assets | $ | 2,324 | $ | 2,385 | |
Liabilities and Stockholders' Equity | |||||
Current liabilities: | |||||
Accounts payable | $ | 286 | $ | 173 | |
Accrued liabilities | 193 | 157 | |||
Income taxes payable | 103 | 85 | |||
Total current liabilities | 582 | 415 | |||
Bonds payable | 480 | 730 | |||
Total liabilities | 1,062 | 1,145 | |||
Stockholders' equity: | |||||
Common stock | 210 | 210 | |||
Retained earnings | 1,052 | 1,030 | |||
Total stockholders' equity | 1,262 | 1,240 | |||
Total liabilities and stockholders' equity | $ | 2,324 | $ | 2,385 | |
Burgess Company Income Statement (dollars in millions) |
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Sales | $ | 4,090 |
Cost of goods sold | 2,800 | |
Gross margin | 1,290 | |
Selling and administrative expenses | 906 | |
Net operating income | 384 | |
Nonoperating items: | ||
Gain on sale of equipment | 2 | |
Income before taxes | 386 | |
Income taxes | 138 | |
Net income | $ | 248 |
Burgess also provided the following information:
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. (Enter your answers in millions not in dollars. List any deduction in cash and cash outflows as negative amounts.)
Cash flow statement reflects the changes in cash during the year from operating, investing and financing activities | ||
Cash flow statement is shown below | ||
Burgess company | ||
Statement of cash flows | ||
Cash flow from operating activities: | ||
Net income | $248 | |
Adjustments to reconcile net income to cash flow from operating activities | ||
Depreciation (848-690+20) | $178 | |
Gain on sale of equipment | -$2 | |
Changes in current operating assets and liabilities | ||
Increase in accounts receivable (705-770) | -$65 | |
Increase in inventories (662-715) | -$53 | |
Increase in accounts payable (286-173) | $113 | |
Increase in accrued liabilities (193-157) | $36 | |
Increase in income taxes payable (103-85) | $18 | |
Net cash flow from operating activities | $473 | |
Cash flows from (used for) investing activities | ||
Cash from sale of equipment | $20 | |
Cash used for purchase of equipment (1601-38-1635) | -$72 | |
Net cash flow from investing activities | -$52 | |
Cash flows from (used for) financing activities | ||
Bond repaid (480-730) | -$250 | |
Cash used for dividends (1030+248-1052) | -$226 | |
Net cash flow from financing activities | -$476 | |
Increase in cash | -$55 | |
Cash at the beginning of the year | $107 | |
Cash at end of the year | $52 | |
Problem 13-12 Prepare a Statement of Cash Flows [LO13-1, LO13-2] A comparative balance sheet and an...
Problem 13-12 Prepare a Statement of Cash Flows [LO13-1, LO13-2] 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 $ 48 $ 99 Accounts receivable 730 669 Inventory 695 646 Total current assets 1,473 1,414 Property, plant, and equipment 1,595 1,565 Less accumulated depreciation 824 678 Net property, plant, and equipment 771 887 Total assets $...
A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company Comparative Balance Sheet (dollars in millions) Ending Beginning Balance Balance Assets Current assets: Cash and cash equivalents $ 52 $ 107 Accounts receivable 770 705 Inventory 715 662 Total current assets 1,537 1,474 Property, plant, and equipment 1,635 1,601 Less accumulated depreciation 848 690 Net property, plant, and 787 911 equipment Total assets $2,324 $2,385 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $...
5 Problem 14-12 Prepare a Statement of Cash Flows [LO14-1, LO14-2] 2 A comparative balance sheet and an income statement for Burgess Company are glven below: points Burgess Company Comparative Balance Sheet (dollars in millions) Ending Beginning Balance еВook Balance Assets Current assets Print Cash and cash equivalents Accounts receivable 46 95 710 651 685 638 Inventory 1,441 1,384 Reference Total current assets Property, plant, and equipment Less accumulated depreciation Net property ,plant, and equipment 1,575 812 1,547 672 763...
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 $ 54 $ 111 Accounts receivable 790 723 Inventory 725 670 Total current assets 1,569 1,504 Property, plant, and equipment 1,655 1,619 Less accumulated depreciation 860 696 Net property, plant, and equipment 795 923 Total assets $ 2,364 $ 2,427 Liabilities and Stockholders' Equity Current liabilities: Accounts...
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 $ 46 $ 95 Accounts receivable 710 651 Inventory 685 638 Total current assets 1,441 1,384 Property, plant, and equipment 1,575 1,547 Less accumulated depreciation 812 672 Net property, plant, and equipment 763 875 Total assets $ 2,204 $ 2,259 Liabilities and Stockholders' Equity Current liabilities: Accounts...
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 $ $ 41 660 660 1,361 1,525 782 743 85 606 618 1,309 1,502 657 845 $2,104 $ 2,154 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...
A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company Comparative Balance Sheet (dollars in millions) Ending Beginning Balance Balance $ $ 141 858 69 940 800 1,809 1,805 950 855 $2.664 730 1,729 1,754 741 1,013 $2.742 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...
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 $ 56 810 735 601 $ 115 741 678 1,534 1,637 702 935 $ 2,469 675 803 $ 2,404 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...
A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company Comparative Balance Sheet (dollars in millions) Ending Beginning Balance Balance Assets Current assets Cash and cash equivalents Accounts receivable Inventory $ $ 40 650 655 83 597 614 Total current assets 1.345 1.294 Property, plant, and equipment Less accumulated depreciation 1.515 776 1.493 654 Net property.plant, and equipment 739839 Total assets $ 2,084 S 2.133 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued...
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 $ 64 890 775 1,729 1,755 920 835 $2,564 $ 131 813 710 1,654 1,709 726 983 $2,637 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...