A comparative balance sheet and an income statement for Burgess Company are give
ID: 2487954 • Letter: A
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 $36 million and accumulated depreciation of $19 million. The cash proceeds from the sale were $19 million. The gain on the sale was $2 million.
Using the indirect method, prepare a statement of cash flows for the year.
bugens company
statement cash of flow
operating activites
net income 242
adjustments to convert net income to cash basis
depreciation
increase in accounts receivable
increas in inventory
increae in accounts payable
increase in accrued liability
increase in income tax payable
gain on sale of equipment
net cash provided by operations activities
investing activities
procceds from sale of equipment
additions to plant and equipments
net cash used in activities
financing activities
retirements of bonds payable
cash dividends
net cash use in financing activities
beggining cash
ending cash
A comparative balance sheet and an income statement for Burgess Company are given below:
Explanation / Answer
indirect method Net income 242 Add: Depreciation expense 174 Increase in accounts payable 112 increase in accrued liabilities 34 increase in income taxes payable 17 less Gain on sale -2 Increase in account receivable -64 increase in inventory -52 219 net cash provided by operating activities 461 Net cash provided by investing activities cash from sale 19 Cash paid for purchase -69 Net cash used by investing activities -50 Net cash provided by financing activities Redempiton on bonds -245 Cash dividend -220 Net cash used by financing activities -465 net cash decrease -54 cash at the beginning 105 Cash at the end 51
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