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

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Chapter1: Financial Statements And Business Decisions
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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.
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