Managerial Accounting Question, would really appreciate both answers and work th
ID: 2496846 • Letter: M
Question
Managerial Accounting Question, would really appreciate both answers and work thank you!
A comparative balance sheet and an income statement for Burgess Company are given below:
Burgess Company
Income Statement
(dollars in millions) Sales$3,940 Cost of goods sold 2,700 Gross margin 1,240 Selling and administrative expenses 896 Net operating income 344 Nonoperating items: Gain on sale of equipment 2 Income before taxes 346 Income taxes 128 Net income$218
Burgess also provided the following information:
The company sold equipment that had an original cost of $28 million and accumulated depreciation of $15 million. The cash proceeds from the sale were $15 million. The gain on the sale was $2 million.
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.)
A comparative balance sheet and an income statement for Burgess Company are given below:
Explanation / Answer
Statement of Cash Flows
Cash flow from Operations
Net Income $218
Adjustment For
Gain on Sale of Equipment - $2
Increase in Trade receivables - $60
Increase in Inventory - $48
Increase in Accounts payable $108
Increase in accrued liabilities $26
Increase in Income tax payable $13
Cash generated from the operations $255
Cash Flow from Investing Activites
Purchase of Property Plant and equipment($1585-$1556+$28) = - $57
Sale of Equipment $15
Net cash used in Investing activities -$42
Cash Flow from Financing Activites
Repayment of Bond -$225
Net cash used in financing activities -$225
Net Increase in Cash and Cash Equivalents -$50
Cash and Cash Equivalents at the begining of the period $97
Cash and Cash Equivalents at the end of the period $47
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