use the following data for abc music co to prepare a statement of cash flows using t 501347

Use the following data for ABC Music Co. to prepare a statement of cash flows using the indirect method for the year ended June 30, 2016.

ABC Music Co.

Income Statement

For the Year Ended June 30, 2016

Net Sales $350,000

Less Expenses

Cost of Goods Sold $200,000

Depreciation Expense 20,000

Administrative Expenses 52,000

Selling Expenses 45,000

Loss on Sale of Investment 500

Total Expenses 317,500

Net Income $ 32,500

ABC Music Co.

Comparative Balance Sheets

June 30 2016 and 2015

Assets

2016 2015

Cash 4,500 $ 15,000

Accounts Receivable (net) 35,000 27,500

Inventory 40,000 50,000

Prepaid Expenses 3,000 2,500

Long Term Investments 20,000 25,000

Plant and Equipment 80,000 40,000

Accumulated Depreciation (20,000) (12,000)

Total Assets $162,500 $148,000

Liabilities

Accounts Payable $ 2,000 $ 6,000

Wages Payable 220 260

Taxes Payable 780 740

Notes Payable 20,000 12,000

Total Liabilities $23,000 $ 19,000

Stockholders Equity

Common Stock $ 65,000 $ 65,000

Retained Earnings 81,500 64,000

Total Paid in Capital and Retained Earnings 146,500 129,000

Less: Treasury Stock ( 7,000) 0

Total Stockholders Equity $139,500 $129,000

Total Liabilities and Stockholders Equity $162,500 $148,000

Additional Information:

A plant asset costing $20,000 was sold for its book value of $8,000. And additional plant asset was purchased for $60,000.

A long term investment was sold for $4,500.

The outstanding notes are long term. An $8,000 note was issued during 2016.

Common stock was repurchased.