CC17 Natalie has prepared the balance sheet and income statement of Cookie & Coffee Creations Inc. for the first year of operations, but does not understand how to prepare the statement of cash flows. The income statement and balance sheet appear below. Recall that the company started operations on November 1, 2017, so all of the opening balances are zero. Additional information: 1. Recall from Chapter 15 that the company bought kitchen equipment (a commercial oven) for $17,000 on November 1, 2017, and signed a $12,000 note payable to help pay for it. The terms provide for semiannual fixed principal payments of $2,000 on May 1 and November 1 of each year, plus interest of 5%. All other furniture, fixture, and equipment were purchased during the year for cash. 2. Recall from Chapter 14 that the company originally issued 25,930 common shares for $25,930, of which 750 shares were repurchased from the lawyer for $500. COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31, 2018 Sales revenue $462,500 Cost of goods sold 231,250 Gross profit 231,250 Operating expenses Salaries and wages expense $92,500 Depreciation expense 9,850 Other operating expenses 35,987 138,337 Income from operations 92,913 Other expenses Interest expense 413 Income before income tax 92,500 Income tax expense 18,500 Net income $ 74,000 COOKIE & COFFEE CREATIONS INC. Balance Sheet October 31, 2018 Assets Current assets Cash $32,219 Accounts receivable 3,250 Inventory 17,897 Prepaid rent 6,300 $ 59,666 Property, plant, and equipment Equipment $99,700 Accumulated depreciationequipment (9,850) 89,850 Total assets $149,516 Liabilities and Stockholders Equity Current liabilities Accounts payable $ 5,848 Income taxes payable 18,500 Dividends payable 700 Salaries and wages payable 2,250 Interest payable 188 Notes payablecurrent portion 4,000 $31,486 Long-term liabilities Notes payablelong-term portion 6,000 Total liabilities 37,486 Stockholders equity Paid-in capital Preferred stock, 2,800 shares issued and outstanding $14,000 Common stock, 25,930 shares issued, 25,180 outstanding 25,930 39,930 Retained earnings 72,600 Total paid-in capital and retained earnings 112,530 Less: Treasury stockcommon (750 shares), at cost 500 Total stockholders equity 112,030 Total liabilities and stockholders equity $149,516 Instructions (a) Prepare a statement of cash flows for Cookie & Coffee Creations Inc. for the year ended October 31, 2018, using the indirect method. (b) Prepare a statement of cash flows for Cookie & Coffee Creations Inc. for the year ended October 31, 2018, using the direct method.