Problem $13-12($Algo$)$ Prepare a Statement of Cash Flows $[$LO$13-1,$ LO$13-2]$

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

Burgess Company

Comparative Balance Sheet

$($dollars in millions$)$

Ending Balance Beginning Balance

Assets

Current assets:

Cash and cash equivalents $ $67$ $ $137$

Accounts receivable $920840$

Inventory $790722$

Total current assets $1,7771,699$

Property, plant, and equipment $1,7851,736$

Less accumulated depreciation $938735$

Net property,plant, and equipment $8471,001$

Total assets $ $2,624$ $ $2,700$

Liabilities and Stockholders' Equity

Current liabilities:

Accounts payable $ $316$ $ $188$

Accrued liabilities $208142$

Income taxes payable $133100$

Total current liabilities $657430$

Bonds payable $555880$

Total liabilities $1,2121,310$

Stockholders' equity:

Common stock $285285$

Retained earnings $1,1271,105$

Total stockholders' equity $1,4121,390$

Total liabilities and stockholders' equity $ $2,624$ $ $2,700$

Burgess Company

Income Statement

$($dollars in millions$)$

Sales $ $4,540$

Cost of goods sold $3,100$

Gross margin $1,440$

Selling and administrative expenses $936$

Net operating income $504$

Nonoperating items:

Gain on sale of equipment $2$

Income before taxes $506$

Income taxes $168$

Net income $ $338$

Burgess also provided the following information:

The company sold equipment that had an original cost of $$68$ million and accumulated depreciation of $$35$ million. The cash proceeds from the sale were $$35$ million. The gain on the sale was $$2$ million.

The company did not issue any new bonds during the year.

The company paid a cash dividend during the year.

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. $($Enter your answers in millions not in dollars. List any deduction in cash and cash outflows as negative amounts.$)$