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.
WhatsApp us