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 Company Comparative Balance Sheet (dollars in millions) Ending Beginning Balance Balance Assets Current assets Cash and cash equivalents Accounts receivable Inventory $57$ 117 750 682 820 740 Total current assets 1,617 1,549 Property, plant, and equipment 1,6851,646 705 Less accumulated depreciation 878 Net property,plant, and equipment 807 941 Total assets $ 2,424 $2,490 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Income taxes payable $ 296 $ 178 152 90 198 113 607 505 420 780 Total current liabilities Bonds payable Total liabilities 1,112 1,200 Stockholders' equity 235 Common stock Retained earnings 235 ,077 1,055 Total stockholders' equity 1,312 1,290 Total liabilities and stockholders' equity $ 2,424 $ 2,490

Explanation / Answer

Statement of Cash flows:

Accumulated Depreciation

Equipment

Retained Earnings

$ Cash flow from operating activities: Net Income 278 + Tax 148 Profit before tax 426 - Gain on sale of equipment -2 + Depreciation 198 622 - Increase in accounts receivable -70 - Increase in inventory -58 + Increase in accounts payable 60 + Increase in accrued liabilites 46 600 - Tax paid [90 + 148 - 113] -125 Cash flow from operating activities 475 Cash flow from investing activities: Purchase of equipment -87 Sale of equipment 25 Cash flow from investing activities -62 Cash flow from financing activities: Redemption of bonds payable -275 Dividend paid -256 Cash flow from financing activities -531

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