Use the following data for ABC Music Co. to prepare a statement of cash flows using the indirect method for...

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