Natalie has prepared the balance sheet and income statement of Cookie & Coffee Creations Inc. and would like you to prepare the cash flow statement. The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2023 for the years 2023 and 2022 and the income statement for the year ended October 31, 2023, are presented below.COOKIE & COFFEE CREATIONS INC.Balance SheetOctober 31,Assets 2023 2022 Cash $29,074 $11,550 Accounts receivable 3,250 2,710 Inventory 7,897 7,450 Prepaid expenses 5,800 6,050 Equipment 102,000 75,500 Accumulated depreciation— equipment (25,200) (9,100) Total assets $122,821 $94,160 Liabilities and Stockholders’ Equity 2018 2017 Accounts payable $1,150 $2,450 Income taxes payable 9,251 7,200 Dividends payable 27,000 27,000 Salaries and wages payable 7,250 1,280 Interest payable 188 0 Note payable 10,000 0 Preferred stock, no par, $6 cumulative, 3,000 and 2,800 shares issued, respectively 15,000 14,000 Common stock, $1 par—25,930 shares issued and outstanding 25,930 25,930 Additional paid-in capital—treasury stock 250 0 Retained earnings 26,802 16,800 Less: Treasury stock 0 (500) Total liabilities and stockholders’ equity $122,821 $94,160 COOKIE & COFFEE CREATIONS INC.Income StatementYear Ended October 31, 2023Sales $485,625Cost of goods sold 222,694Gross profit 262,931Operating expenses Salaries and wages expense $147,979 Depreciation expense 17,600 Other operating expenses 48,186 213,765Income from operations 49,166Other expenses Interest expense $413 Loss on disposal of plant assets 2,500 2,913Income before income tax 46,253Income tax expense 9,251Net income $37,002Additional information:1. Equipment (cost $4,500 and book value $3,000) was disposed of at the beginning of the year for $500 cash and replaced with new equipment purchased for $4,000 cash.2. Additional equipment was bought for $14,000 on November 1, 2022. A $12,000 note payable was signed. The terms provide for equal semi-annual installment payments of $2,000 on May 1 and November 1 of each year, plus interest of 5% on the outstanding principal balance.3. Other equipment was bought for $13,000 cash.4. Dividends were declared on the preferred and common stock on October 15, 2023, to be paid on November 15, 2023.5. Accounts payable relate only to merchandise creditors.6. Prepaid expenses relate only to other operating expenses.Prepare a statement of cash flows for Cookie & Coffee Creations Inc. for the year ended October 31, 2023, using the direct method. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)COOKIE & COFFEE CREATIONS INC.Statement of Cash Flows (Direct Method)

The direct method is one of the two accounting treatments used to generate the cash flow…

Answered: Natalie has prepared the balance sheet…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter8: Current And Contingent Liabilities

Section: Chapter Questions

Problem 80BPSB: Ratio Analysis Consider the following information taken from Chicago Water Slides (CWSs) financial...

See similar textbooks

Related questions

Question

Natalie has prepared the balance sheet and income statement of Cookie & Coffee Creations Inc. and would like you to prepare the cash flow statement. The comparative balance sheet of Cookie & Coffee Creations Inc. at October 31, 2023 for the years 2023 and 2022 and the income statement for the year ended October 31, 2023, are presented below.

COOKIE & COFFEE CREATIONS INC. Balance Sheet October 31,
Assets	2023	2022
Cash	$29,074	$11,550
Accounts receivable	3,250	2,710
Inventory	7,897	7,450
Prepaid expenses	5,800	6,050
Equipment	102,000	75,500
Accumulated depreciation— equipment	(25,200)	(9,100)
Total assets	$122,821	$94,160
Liabilities and Stockholders’ Equity	2018	2017
Accounts payable	$1,150	$2,450
Income taxes payable	9,251	7,200
Dividends payable	27,000	27,000
Salaries and wages payable	7,250	1,280
Interest payable	188	0
Note payable	10,000	0
Preferred stock, no par, $6 cumulative, 3,000 and 2,800 shares issued, respectively	15,000	14,000
Common stock, $1 par—25,930 shares issued and outstanding	25,930	25,930
Additional paid-in capital—treasury stock	250	0
Retained earnings	26,802	16,800
Less: Treasury stock	0	(500)
Total liabilities and stockholders’ equity	$122,821	$94,160

COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31, 2023
Sales		$485,625
Cost of goods sold		222,694
Gross profit		262,931
Operating expenses
Salaries and wages expense	$147,979
Depreciation expense	17,600
Other operating expenses	48,186	213,765
Income from operations		49,166
Other expenses
Interest expense	$413
Loss on disposal of plant assets	2,500	2,913
Income before income tax		46,253
Income tax expense		9,251
Net income		$37,002

Additional information:

1.		Equipment (cost $4,500 and book value $3,000) was disposed of at the beginning of the year for $500 cash and replaced with new equipment purchased for $4,000 cash.
2.		Additional equipment was bought for $14,000 on November 1, 2022. A $12,000 note payable was signed. The terms provide for equal semi-annual installment payments of $2,000 on May 1 and November 1 of each year, plus interest of 5% on the outstanding principal balance.
3.		Other equipment was bought for $13,000 cash.
4.		Dividends were declared on the preferred and common stock on October 15, 2023, to be paid on November 15, 2023.
5.		Accounts payable relate only to merchandise creditors.
6.		Prepaid expenses relate only to other operating expenses.

Prepare a statement of cash flows for Cookie & Coffee Creations Inc. for the year ended October 31, 2023, using the direct method. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

COOKIE & COFFEE CREATIONS INC. Statement of Cash Flows (Direct Method)

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.