Prepare the statement of cash flows of surmise company for

Reference no: EM13576703

The comparative balance sheets for 2013 and 2012 are given below for Surmise Company. Net income for 2013 was $72 million.

SURMISE COMPANY Comparative Balance Sheets December 31, 2013 and 2012 ($ in millions)
	2013		2012
Assets
Cash	$	107	$	58
Accounts receivable		85		98
Less: Allowance for uncollectible accounts		(19)		(3)
Prepaid expenses		13		12
Inventory		143		125
Long-term investment		110		75
Land		90		90
Buildings and equipment		360		250
Less: Accumulated depreciation		(125)		(100)
Patent		21		24

	$	785	$	629

Liabilities
Accounts payable	$	19	$	34
Accrued liabilities		(4)		16
Notes payable		40		0
Lease liability		110		0
Bonds payable		60		120
Shareholders' Equity
Common stock		65		50
Paid-in capital-excess of par		261		205
Retained earnings		234		204

	$	785	$	629

Required:

Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2013. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for changes in some account balances. A spreadsheet or T-account analysis will be helpful. (Enter your answers in millions. Amounts to be deducted should be indicated with a minus sign.)

Reference no: EM13576703

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