Continuing Cookie Chronicle 12 Natalie has prepared the bala

Continuing Cookie Chronicle 12 Natalie has prepared the balance sheet and income statement of Cookie & Coffee Creations Inc. for the first year of operations, but does not uyunderstand how to prepare the cash flow statement. The income statement and balance sheet appear below. Recall that the company started operations on November 1, 2018, so all of the opening balances are zero. Additional information: 1 The company bought kitchen equipment (a commercial oven) for $29,000 on November 1, 2018, 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 11 that The company originally issued 25,930 common shares for $25,930, of which 750 shares were repurchased from the lawyer for $500. Cost of goeds sold Gress proft Operating expenses 31.250 Salaries and wages expense $92,500 Income from operations ncome tas ax expense COOKIE&COFFEE; CREATIONS INC. Balance Sheet October 31, 2019 Assets Current assets Cash Accounts receivable Prepaid expenses Property, plant, and equipment Furniture and fixtures 1 250) 1125 Computer equipment Kitchen equipment Total assets Liabilities and Stockholders\' Equity Current liabilities Accounts payable Income tax payable Dividends payable Salaries and wages payable Interest payable Note payable-current portion Long-term liabilities Note portion

Solution

COOKIE & COFFEE CREATIONS INC. Statement of Cash Flows (Indirect Method) For the Year ended Oct 31, 2019 Cash Flow from opearating activities: Net Income        78,760.00 Add/(Less) non cash effects on operating activities Depreciation expense          3,900.00 Increase in Accounts Receivables        (3,250.00) Increase in Inventory     (17,897.00) Increase in Prepaid Expenses        (6,300.00) Increase in Accounts Payables          5,848.00 Increase in Income Tax Payable        19,690.00 Increase in Salaries & Wages Payable          2,250.00 Increase in Interest Payable              188.00          4,429.00 Net Cash provided by operating activities        83,189.00 Cash flow from Investing Activities Purchase of Furniture & Fixtures     (12,500.00) Purchase of Computer Equipment        (4,200.00) Purchase of Kitchen Equipment     (17,000.00) Cash Flow / (used) from Investing activities     (33,700.00) Cash Flow from Financing Activities Cash paid to Notes Payable        (2,000.00) Issue of Preferred Stock        14,000.00 Issue of Common Stock        25,930.00 Purchase of Treasury Stock           (500.00) Cash dividend paid           (700.00) Cash Flow from Financing Activities        36,730.00 Net Increase / (Decrease) in Cash        86,219.00 Cash balance at the beginning                       -   Cash balance at the end        86,219.00