CCC12 CONTINUING COOKIE CHRONICLE
(a) Indirect method
COOKIE & COFFEE CREATIONS INC.
Statement of Cash Flows
for the Year Ended October 31, 2020
Cash flows from operating activities
Net income ……………………………………………………. $37,002
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation expense …………………………….. $ 17,600
Loss on disposal of plant assets …………….. 2,500
Increase in accounts receivable ……………… (540)
Cash flows from investing activities
Sale of equipment …………………………………………. $ 500
Purchase of equipment ($4,000 + $2,000 +
($13,000)………………………………………… . (19,000)
Noncash investing and financing activities
Issuance of note payable to purchase
equipment …………………………………………………….. $12,000
CONTINUING COOKIE CHRONICLE (Continued)
*(b) Direct method
COOKIE & COFFEE CREATIONS INC.
Statement of Cash Flows
for the Year Ended October 31, 2020
Cash flows from operating activities
Cash receipts from customers ………………………. (1) $485,085
Cash payments
To suppliers …………………………………………… $224,441 (2)
Cash flows from investing activities
Sale of equipment …………………………………………. $ 500
Cash flows from financing activities
Issuance of preferred stock …………………………... $ 1,000
Net increase in cash …………………………………………….. 16,774
Cash, November 1 ……………………………………………….. 5,550
CONTINUING COOKIE CHRONICLE (Continued)
(b) Continued
Calculations:
(1) Cash receipts from customers
(2) Cash payments to suppliers
Cost of goods sold ………………………………………………… $222,694
(3) Cash payments for operating expenses
Other operating expenses and salaries and wages …. $196,165*
(4) Cash payments for interest
(5) Cash payments for income tax