Use the following data for Tatum Music Company to prepare a Statement of cash flows using the indirect method for the year ended June 30, 20x8. Use the template I gave you to assist you in preparing the information (under Course Documents).

Tatum Music Company
Income Statement
For the Year Ended June 30, 20x8
Sales					$350,000
Less expenses
	Cost of goods sold	$200,000
	Depreciation expense	20,000
	Administrative expenses	52,000
	Selling expenses	35,000
	Loss on sale of investment	500		307,500
Income before income taxes					$ 42,500
Income taxes expense					10,000
Net income			$ 32,500

Tatum Music Company
Comparative Balance Sheets
June 30, 20x8 and 20x7
Assets	20x8	20x7
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
Income taxes payable	780	740
Notes payable	20,000	12,000
Total liabilities	$ 23,000	$ 19,000
Stockholders' Equity
Common stock Treasury Stock	65,000 (7,000)	$ 65,000 -----
Retained earnings	81,500	64,000
Total stockholders' equity	$139,500	$129,000
Total liabilities and stockholders' equity	$162,500	$148,000

Additional information:

-A plant asset costing $20,000 with accumulated depreciation of $12,000 was sold for cash. Additional equipment was purchased for $60,000

-A long-term investment with a book value of $5,000 was sold for $4,500.

-The outstanding notes are long-term. An $8,000 note was issued during 20x8.

Treasury Stock was purchased in the amount of $7,000.

Dividends of $15,000 were paid to shareholders.

This is the template

		ANALYZE CHANGE
Account Name	first yr(2007)	debit	credit	2nd year(2008)
Cash	15,000			4,500
AR	27,500			35,000
Inventory	50,000			40,000
Prepaid Expenses	2,500			3,000
Investments	25,000			20,000
Equipment	40,000			80,000
Acc dep Equipment	(12,000)			(20,000)
Intangible assets
Total Assets	148,000			162,500
AP	6,000			2,000
Accliabilities	260			220
Inc tax payable	740			780
Notes payable	12,000			20,000
mortgage payable
comm stk	65,000			65,000
Retained earnings	64,000			81,500
Treasury Stck				(7,000)
TOTAL LIABILITIES AND OE	148,000	-	-	162,500
Statement of Cash Flows
Operating:
Net Income
Depreciation expense
Depreciation expense
Amortization expense
Gain or loss on Sale of Plant Assets
Gain or loss on Sale of investments
Change in in AR
Change in Inventory
Change in Prepaid
Change in AP
Change in Acc liabilities
Change in Inc Tax Payable
Net Cash Flow Operating
Investing:
Sale of Plant assets
Sale of Investments
Purchased Investments
Purchased new equipment
Purchased Plant assets
Net Cash Flow Investing
Financing:
Repayment of Notes Pay
Issuance of Notes Payble
Mortage Reduction
Paid Bonds
Issued Comm stk
Purchased Treas Stock
Cash dividends paid
Net Cash Flow Financing Activities
Net increase (decrease) in Cash				-
Cash at beginnning of year
Cash at end of year				-
Schedule of Non Cash Investing and Financing Activities