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 CompanyIncome StatementFor the Year Ended June 30, 2010Sales$700,000Less expensesCost of goods sold$400,000Depreciation expense40,000Administrative expenses104,000Selling expenses70,000Loss on sale of investment 1,000 615,000Income before income taxes85,000Income taxes expense 20,000Net income$ 65,000

Hines Music Company

Comparative Balance Sheets

June 30, 2010 and 2009

Assets20102009Cash$ 9,000$ 30,000Accounts receivable (net)70,00055,000Inventory80,000100,000Prepaid insurance6,0005,000Long-term investments40,00050,000Plant and equipment160,00080,000Accumulated depreciation(40,000)(24,000)Total assets$325,000$296,000LiabilitiesAccounts payable$ 4,000$ 12,000Wages payable440520Income taxes payable1,5601,480Notes payable 40,000 24,000Total liabilities$ 46,000$ 38,000Stockholders' EquityCommon stock$ 116,000$130,000Retained earnings 163,000 128,000Total stockholders' equity$279,000$258,000Total liabilities and stockholders' equity$325,000$296,000

Additional information:

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