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Prepare a statement of cash flows for Cookie & Coffee Creations Inc. for the year ended October 31, 2023, using the direct method.

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 9,251 7,200 Income taxes payable Dividends payable 27,000 27,000 Salaries and wages payable 7,250 1,280 Interest payable 188 0 Note payable 10,000 0 15,000 14,000 25,930 25,930 Preferred stock, no par, $6 cumulative, 3,000 and 2,800 shares issued, respectively Common stock, $1 par25,930 shares issued and outstanding Additional paid-in capital-treasury stock Retained earnings 250 0 26,802 16,800 Less: Treasury stock (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 17,600 Depreciation expense 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 46,253 Income before income tax 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. COOKIE & COFFEE CREATIONS INC. Statement of Cash Flows (Direct Method) | For the Year Ended October 31, 2023 Cash Flows from Operating Activities $ $ $ - $ > LA A

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