Natalie has prepared the balance sheet and income statement of Cookie & Coffee Creations Inc. and would
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 indirect method. (Show amounts that decrease cashflow with either a - sign e.g. -15,000 or in parenthesis e.g.(15,000).) Partially correct answer icon Your answer is partially correct.
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 - signe.g. -15,000 or in parenthesis e.g. (15,000).)
$Enter a dollar amount |
Accounting Principles
ISBN: 978-1118342190
11th Edition
Authors: Jerry Weygandt, Paul Kimmel, Donald Kieso