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.

Burgess Company Comparative Balance Sheet (dollars in millions) Ending Balance Beginning Balance Assets Current assets: $ 49 645 660 1,354 1,515 765 750 $2.104 $ 79 580 615 1,274 1,466 641 825 $2,099 Accounts receivable Inventory Property, plant, and equipment. Less accumulated depreciation .. Net property, plant, and equipment . Total assets Liabilities and Stockholders' Equity Current liabilities $250 190 76 516 450 966 $ 155 165 70 390 620 1,010 Accounts payable ..r... Accrued liabilities Income taxes payable Total current liabilities Bonds payable Total liabilities Stockholders' equity: . . ._. .. 161 977 1,138 $2,104 161 928 1,089 $2,099 Retained earnings Total liabilities and stockholders' equity .. Burgess Company Income Statement (dollars in millions) Net sales . Cost of goods sold Gross margin Selling and administrative expenses. Net operating income . . .. Nonoperating items: Gain on sale of equipment... Income before taxes $3,600 2,550 1,050 875 175 3 178 63 $ 115 Net income..