CHAPTER 17 Cookie Creations (Note: This is a continuation of the Cookie Creations from Chapters 1 through 16.) 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. For this assignment, assume all stock was issued for cash and that all opening account balances are zero at November 1, 2023. Additional information: 1. The company bought kitchen equipment (a commercial oven) for $17,000 on November 1, 2023, and signed a $12,000 note payable to help pay for it. The terms provide for semiapqual 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. The company issued 25,930 common shares for $25,930, of which 750 shares were repurchased from the lawyer who provided legal advice during the incorporation process for $500. Again, assume all shares were originally issued for cash. COOKIE & COFFEE CREATIONS INC. Income Statement Year Ended October 31, 2024 Sales revenue Cost of goods sold Gross profit $462,500 231.250 231,250 Operating expenses Salaries and wages expense $92,500 Depreciation expense 9,850 Other operating expenses 35.850 138.200 Income from operations 93,050 Other expenses Interest expense Income before income tax Income tax expense Net income 550 92,500 18.500 $ 74,000 COOKIE & COFFEE CREATIONS INC. Balance Sheet October 31, 2024 Assets Current assets Cash Accounts receivable Inventory Prepaid rent Property, plant, and equipment Equipment Accumulated depreciation-equipment Total assets Liabilities and Stockholders' Equity $32,219 3,250 17,897 6.300 $ 59,666 $99,700 (9.850) 89.850 $149.516 Current liabilities Accounts payable Income taxes payable Dividends payable Salaries and wages payable Interest payable Notes payable-current portion Long-term liabilities Total liabilities Notes payable-long-term portion $ 5,786 18,500 700 2,250 250 4.000 $31,486 6.000 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 Total paid-in capital and retained earnings 72.600 112,530 Less: Treasury stock-common (750 shares), 500 at cost Total stockholders' equity Total liabilities and stockholders' equity Instructions 112.030 $149.516 (a) Prepare a statement of cash flows for Cookie & Coffee Creations Inc. for the year ended October 31, 2024, using the indirect method. (b) Prepare a statement of cash flows for Cookie & Coffee Creations Inc. for the year ended October 31, 2024, using the direct method\