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:

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 770 715 S 52 107 705 662 Total current assets Property, plant, and equipment Net property,plant, and equipment Total assets 1,537 1,474 1,635 1,601 690 Less accumulated depreciation 848 787 911 $ 2,324 S 2,385 Liabilities and Stockholders' Equity Current liabilities Accounts payable Accrued liabilities S 286 173 157 85 193 103 Income taxes payable Total current liabilities Bonds payable 582 480 415 730 Total liabilities 1,062 1,145 Stockholders' equity: 210 Common stock Retained earnings 210 1,052 1,030 Total stockholders' equity 1,262 1,240 Total liabilities and stockholders' equity $ 2,324 $ 2,385

Explanation / Answer

Burgess Company All Amounts in $ Statement of Cash Flows - Indirect Method Cash Flows from Operating Activities Net Income per Income Statement 248 Add : Depreciation Expense 178 Less : Gain on Sale of Equipment -2 Add : Income Tax Expense 138 314 Cash Flows before Working Capital Changes 562 Less : Increase in Accounts Receivable -65 Less : Increase in Inventory -53 Add : Increase in Accounts Payable 113 Add : Increase in Accrued Liabilities 36 Add : Increase in Income Taxes Payable 18 49 Cash Inflows from Operating Activities 611 Cash Flows from Investing Activities Sale of Equipment 20 Purchase of Equipment -72 -52 Cash Flows from Financing Activities Repayment of Bonds Payable -250 Income Taxes Paid -138 Cash Dividends Paid -226 -614 Net Cash Outflows during the year -55 Opening Cash/Cash Equivalents 107 Closing Cash/Cash Equivalents 52

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