A comparative balance sheet and an income statement for Burgess Company are give

Question

A comparative balance sheet and an income statement for Burgess Company are given below:

Burgess also provided the following information:

The company sold equipment that had an original cost of $46 million and accumulated depreciation of $24 million. The cash proceeds from the sale were $24 million. The gain on the sale was $2 million.

The company did not complete any common stock transactions during the year.

Using the indirect method, prepare a statement of cash flows for the year.

A comparative balance sheet and an income statement for Burgess Company are given below:

Explanation / Answer

Statement of Cash Flow Particulars Amount Total Amount Income                      272.00 Gain on sale of Equipment                        (2.00) Depreciation                      194.00 Increase in AR                      (69.00) Increase in inventory                      (57.00) Increase in AP                      117.00 Increase in Accrued liabilities                        44.00 Increase in income taxes payable                        22.00 Cash flow from operating activities                   521.00 Cash flow from Investing activities Purchase of PPE                      (84.00) Sale of PPE                        24.00 Cash flow from Investing activities                   (60.00) Cash flow from Financing activities Redemption of Bonds                   (270.00) Dividends Paid                   (250.00) Cash flow from Financing activities                 (520.00) Opening cash and cash equivalents                   115.00 Closing cash and cash equivalents                      56.00

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