Use the following data for Hines Music Company to prepare a statement of cash flows using the indirect method for the year ended June 30, 2010. Hines Music Company Income Statement For the Year Ended June 30, 2010 Sales $700,000 Less expenses Cost of goods sold $400,000 Depreciation expense 40,000 Administrative expenses 104,000 Selling expenses 70,000 Loss on sale of investment 1,000 615,000 Income before income taxes 85,000 Income taxes expense Net income Hines Music Company Comparative Balance Sheets June 30, 2010 and 2009 Assets Cash Accounts receivable (net) Inventory Prepaid insurance Long-term investments Plant and equipment Accumulated depreciation 2010 2009 $ 9,000 $ 30,000 70,000 55,000 80,000 100,000 6,000 5,000 40,000 50,000 160,000 80,000 (40,000) (24,000) Total assets $325,000 $296,000 Liabilities Accounts payable $ 4,000 $ 12,000 Wages payable 440 520 Income taxes payable 1,560 1,480 Notes payable 40,000 24,000 Total liabilities $46,000 $ 38,000 Stockholders' Equity Common stock $ 116,000 $130,000 Retained earnings 163,000 128,000 Total stockholders' equity $279,000 $258,000 Total liabilities and stockholders' equity $325,000 $296,000 Additional information: 20,000 $65,000 A plant asset costing $40,000 was sold for its book value of $16,000. A long-term investment was sold for $9,000. The outstanding notes are long-term. A $16,000 note was issued during 2010.
Use the following data for Hines Music Company to prepare a statement of cash flows using the indirect method for the year ended June 30, 2010. Hines Music Company Income Statement For the Year Ended June 30, 2010 Sales $700,000 Less expenses Cost of goods sold $400,000 Depreciation expense 40,000 Administrative expenses 104,000 Selling expenses 70,000 Loss on sale of investment 1,000 615,000 Income before income taxes 85,000 Income taxes expense Net income Hines Music Company Comparative Balance Sheets June 30, 2010 and 2009 Assets Cash Accounts receivable (net) Inventory Prepaid insurance Long-term investments Plant and equipment Accumulated depreciation 2010 2009 $ 9,000 $ 30,000 70,000 55,000 80,000 100,000 6,000 5,000 40,000 50,000 160,000 80,000 (40,000) (24,000) Total assets $325,000 $296,000 Liabilities Accounts payable $ 4,000 $ 12,000 Wages payable 440 520 Income taxes payable 1,560 1,480 Notes payable 40,000 24,000 Total liabilities $46,000 $ 38,000 Stockholders' Equity Common stock $ 116,000 $130,000 Retained earnings 163,000 128,000 Total stockholders' equity $279,000 $258,000 Total liabilities and stockholders' equity $325,000 $296,000 Additional information: 20,000 $65,000 A plant asset costing $40,000 was sold for its book value of $16,000. A long-term investment was sold for $9,000. The outstanding notes are long-term. A $16,000 note was issued during 2010.
Financial Accounting: The Impact on Decision Makers
10th Edition
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Gary A. Porter, Curtis L. Norton
Chapter12: The Statement Of Cash Flows
Section: Chapter Questions
Problem 12.8E
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Transcribed Image Text:Use the following data for Hines Music Company to prepare a statement of cash flows
using the indirect method for the year ended June 30, 2010.
Hines Music Company
Income Statement
For the Year Ended June 30, 2010
Sales
$700,000
Less expenses
Cost of goods sold
$400,000
Depreciation expense
40,000
Administrative expenses
104,000
Selling expenses
70,000
Loss on sale of investment
1,000
615,000
Income before income taxes
85,000
Income taxes expense
Net income
Hines Music Company
Comparative Balance Sheets
June 30, 2010 and 2009
Assets
Cash
Accounts receivable (net)
Inventory
Prepaid insurance
Long-term investments
Plant and equipment
Accumulated depreciation
2010
2009
$ 9,000
$ 30,000
70,000
55,000
80,000
100,000
6,000
5,000
40,000
50,000
160,000
80,000
(40,000)
(24,000)
Total assets
$325,000 $296,000
Liabilities
Accounts payable
$ 4,000
$ 12,000
Wages payable
440
520
Income taxes payable
1,560
1,480
Notes payable
40,000
24,000
Total liabilities
$46,000
$ 38,000
Stockholders' Equity
Common stock
$ 116,000
$130,000
Retained earnings
163,000
128,000
Total stockholders' equity
$279,000
$258,000
Total liabilities and stockholders' equity
$325,000
$296,000
Additional information:
20,000
$65,000
A plant asset costing $40,000 was sold for its book value of $16,000.
A long-term investment was sold for $9,000.
The outstanding notes are long-term. A $16,000 note was issued during 2010.
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