Question

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

Burgess Company Comparative Balance Sheet (dollars in millions)
	Ending Balance		Beginning Balance
Assets
Current assets:
Cash and cash equivalents	$	54	$	111
Accounts receivable		790		723
Inventory		725		670
Total currentassets		1,569		1,504
Property, plant, andequipment		1,655		1,619
Less accumulated depreciation		860		696
Net property,plant,and equipment		795		923
Totalassets	$	2,364	$	2,427
Liabilitiesand Stockholders' Equity
Currentliabilities:
Accounts payable	$	290	$	175
Accrued liabilities		195		155
Income taxes payable		107		87
Total currentliabilities		592		417
Bonds payable		490		750
Totalliabilities		1,082		1,167
Stockholders'equity:
Common stock		220		220
Retained earnings		1,062		1,040
Total stockholders'equity		1,282		1,260
Total liabilitiesand stockholders' equity	$	2,364	$	2,427

Burgess Company Income Statement (dollars in millions)
Sales	$	4,150
Cost of goodssold		2,840
Gross margin		1,310
Selling andadministrative expenses		910
Net operatingincome		400
Nonoperating items:Gain on sale of equipment		2
Income beforetaxes		402
Income taxes		142
Net income	$	260

Burgess also provided the following information:

1.	The company sold equipment that had an original cost of $42million and accumulated depreciation of $22 million. The cashproceeds from the sale were $22 million. The gain on the sale was$2 million.
2.	The company did not issue anynew bonds during the year.
3.	The company paid a cash dividendduring the year.
4.	The company did not complete anycommon stock transactions during the year.

Required:
1.	Using the indirect method, prepare a statement of cash flows forthe year. (Enter your answers in millions not in dollars .List any deduction in cash and cash outflows as negativeamounts.)