A comparative balance sheet and an income statement for Burgess Company are give
ID: 2521538 • Letter: A
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 $ 65 $ 133 822 714 900 780 Total current assets 1,7451,669 1,765 926 1,718 729 Property, plant, and equipment Less accumulated depreciation Net property,plant, and equipment Total assets 839 989 $ 2,584 $ 2,658 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Accrued liabilities Income taxes payable $ 312 $ 186 144 98 206 129 Total current liabilities Bonds payable 647 545 428 860 Total liabilities 1,192 1,288 Stockholders' equity: Common stock Retained earnings 275 1,117 1,095 275 Total stockholders' equity 1,392 1,370 Total liabilities and stockholders' equity $ 2,584 $ 2,658Explanation / Answer
Burgess Company
Statement of Cash Flows - Indirect Method
$
$
Operating activities:
Net Income
326.00
Adjustments to convert net income to cash basis:
Depreciation (926 - 729 + 33)
230.00
Increase in inventory
-66.00
Increase in accounts receivable
-78.00
Increase in accounts payable
126.00
Increase in accrued liabilities
62.00
Increase in income taxes payable
31.00
Gain on sale of equipment
-2.00
Net cash provided by operating activities
629.00
Investing activities:
Proceeds from sale of equipment
33.00
Additions to plant and equipment [1765 - (1718 - 64)]
-111.00
Net cash used in investing activities
-78.00
Financing activities:
Retirement of bonds payable (860 - 545)
-315.00
Cash dividends (1095 + 326 - 1117)
-304.00
Net cash used in financing activities
-619.00
Net decrease in cash
-68.00
Beginning cash and cash equivalents
133.00
Ending cash and cash equivalents
65.00
Burgess Company
Statement of Cash Flows - Indirect Method
$
$
Operating activities:
Net Income
326.00
Adjustments to convert net income to cash basis:
Depreciation (926 - 729 + 33)
230.00
Increase in inventory
-66.00
Increase in accounts receivable
-78.00
Increase in accounts payable
126.00
Increase in accrued liabilities
62.00
Increase in income taxes payable
31.00
Gain on sale of equipment
-2.00
Net cash provided by operating activities
629.00
Investing activities:
Proceeds from sale of equipment
33.00
Additions to plant and equipment [1765 - (1718 - 64)]
-111.00
Net cash used in investing activities
-78.00
Financing activities:
Retirement of bonds payable (860 - 545)
-315.00
Cash dividends (1095 + 326 - 1117)
-304.00
Net cash used in financing activities
-619.00
Net decrease in cash
-68.00
Beginning cash and cash equivalents
133.00
Ending cash and cash equivalents
65.00
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