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.
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| 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.
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