Question

A comparative balance sheet and an income statement for Burgess Company are given below:


Burgess also provided the following information:
1. The company sold equipment that had an original cost of $ 13 million and accumulated depreciation of $ 8 million. The cash proceeds from the sale were $ 8 million. The gain on the sale was $ 3 million.
2. The company did not issue any new bonds during the year.
3. The company paid a cash dividend during the year.
4. The company did not complete any common stock transactions during the year.

Required:
1. Using the indirect method, prepare a statement of cash flows for the year.
2. Assume that Burgess had sales of $ 3,800, net income of $ 135, and net cash provided by operating activities of $ 150 in the prior year (all numbers are stated in millions). Prepare a memo that summarizes your interpretations of Burgess’s financialperformance.


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  • CreatedMay 20, 2014
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