A comparative balance sheet and an income statement for Burgess Company are give
ID: 2600594 • 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 Ba lance Balance Assets Current assets: $65 900 780 ,745 1,765 926 839 $ 133 822 714 1,669 1,718 729 989 $2,658 Cash and cash equivalents Accounts receivable Inventory Total current assets Property, plant, and equipment Less accumulated depreciation Net property,plant, and equipment Total assets Liabilities and Stockholders' Equity Current liabilities: $2,584 $ 312 206 129 647 545 1.192 $ 186 144 98 428 860 1,288 Accounts payable Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Stockholders' equity: 275 275 1,095 1,370 $2,658 Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 1,392 $2,584Explanation / Answer
Burgess Company
CASH FLOW STATEMENT FOR THE YEAR ENDED
$ in millions
$ in millions
CASH FLOW FROM OPERATING ACTIVITIES
Net Income
326.00
Adjustment For non cash items and working capital changes:
Gain on sale of equipment
-2.00
Depreciation [926 - (729-33)]
230.00
Increase in Accounts receivable
-78.00
Increase in inventory
-66.00
Increase in Accounts payable
126.00
Increase in Accrued liabilities
62.00
Increase in Income tax payable
31.00
NET CASH FROM OPERATING ACTIVITIES (A)
629.00
CASH FLOW FROM INVESTING ACTIVITIES
Sale of equipment
33.00
Purchase of Equipment [1765 - (1718 -64)]
-111.00
NET CASH FROM INVESTING ACTIVITIES (B)
-78.00
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of Bond (860-545)
-315.00
Payment of dividend
-304.00
NET CASH FROM FINANCING ACTIVITIES (C)
-619.00
NET CHANGES IN CASH AND CASH EQUIVALENTS (A+B+C)
-68.00
ADD: OPENING CASH AND CASH EQUIVALENTS
133.00
CLOSING CASH AND CASH EQUIVALENTS
65.00
Burgess Company
CASH FLOW STATEMENT FOR THE YEAR ENDED
$ in millions
$ in millions
CASH FLOW FROM OPERATING ACTIVITIES
Net Income
326.00
Adjustment For non cash items and working capital changes:
Gain on sale of equipment
-2.00
Depreciation [926 - (729-33)]
230.00
Increase in Accounts receivable
-78.00
Increase in inventory
-66.00
Increase in Accounts payable
126.00
Increase in Accrued liabilities
62.00
Increase in Income tax payable
31.00
NET CASH FROM OPERATING ACTIVITIES (A)
629.00
CASH FLOW FROM INVESTING ACTIVITIES
Sale of equipment
33.00
Purchase of Equipment [1765 - (1718 -64)]
-111.00
NET CASH FROM INVESTING ACTIVITIES (B)
-78.00
CASH FLOW FROM FINANCING ACTIVITIES
Repayment of Bond (860-545)
-315.00
Payment of dividend
-304.00
NET CASH FROM FINANCING ACTIVITIES (C)
-619.00
NET CHANGES IN CASH AND CASH EQUIVALENTS (A+B+C)
-68.00
ADD: OPENING CASH AND CASH EQUIVALENTS
133.00
CLOSING CASH AND CASH EQUIVALENTS
65.00
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