I could really use some help with the first half of this problem Curtis’s Coffee Cookie Creations Cash $7,500 $11,630 Accounts receivable 100 800 Inventory 450 1,200 Equipment 2,500 1,000* *Cookie Creations decided not to buy the delivery van considered in Chapter 9. Combining forces will also allow Natalie and Curtis to pool their resources and buy a few more assets to run their new business venture. Curtis and Natalie then meet with a lawyer and form a corporation on November 1, 2023, called Cookie & Coffee Creations Inc. The articles of incorporation state that there will be two classes of shares that the corporation is authorized to issue: common shares and preferred shares. They authorize 100,000 no-par shares of common stock, and 10,000 no-par shares of preferred stock with a $0.50 noncumulative dividend. CC11 (Continued) The assets held by each of their businesses will be transferred into the corporation at current market value. Curtis will receive 10,550 common shares, and Natalie will receive 14,630 common shares in the corporation. Therefore, the shares have a fair value of $1 per share. Natalie and Curtis are very excited about this new business venture. They come to you with the following questions: “Curtis’s dad and Natalie’s grandmother are interested in investing $5,000 each in the business venture. We are thinking of issuing them preferred shares. What would be the advantage of issuing them preferred shares instead of common shares?” 2. “Our lawyer has sent us a bill for $750. When we discussed the bill with her, she indicated that she would be willing to receive common shares in our new corporation instead of cash for her se We would be happy to issue her shares, but we’re a bit worried about accounting for this transaction. Can we do this? If so, how do we determine how many shares to give her?” Instructions (a) Answer their questions. (b) Prepare the journal entries required on November 1, 2023, the date when Natalie and Curtis transfer the assets of their respective businesses into Cookie & Coffee Creations Inc. (c) Assume that Cookie & Coffee Creations Inc. issues 1,000 $0.50 noncumulative preferred shares to Curtis’s dad and the same number to Natalie’s grandmother, in both cases for $5,000. Also assume that Cookie & Coffee Creations Inc. issues 750 common shares to its lawyer. Prepare the journal entries for each of these transactions. They all occurred on November 1. (d) Prepare the opening balance sheet for Cookie & Coffee Creations Inc. as of November 1, 2023, including the journal entries in (b) and (c) above. CC11 (Continued) Part 2 After establishing their company’s fiscal year-end to be October 31, Natalie and Curtis begin operating Cookie & Coffee Creations Inc. on November 1, 2023. On that date, after the issuance of shares, the paid-in capital section of the company’s balance sheet is as follows. Paid-in capital Preferred stock, $0.50 noncumulative, no par value, 10,000 shares authorized, 2,000 shares issued $10,000 Common stock, no par value, 100,000 shares authorized, 25,930 shares issued 25,930 Cookie & Coffee Creations then has the following selected transactions during its first year of operations. Dec. 1 Issues an additional 800 preferred shares to Natalie’s brother for $4,000. Apr. 30 Declares a semiannual dividend to the preferred stockholders of record on May 15, payable on June 1. June 30 Repurchases 750 shares of common stock issued to the lawyer, for $500. Recall that these were originally issued for $750. The lawyer had decided to retire and wanted to liquidate all of her assets. Oct. 31 The company has had a very successful first year of operations. It earned revenues of $462,500 and incurred expenses of $364,050 (including $750 legal fee, but excluding income tax). 31 Records income tax expense. (The company has a 20% income tax rate.) 31 Declares a semiannual dividend to the preferred stockholders of record on November 15, payable on December 1. Instructions (a) Prepare the journal entries to record the above transactions. (b) Prepare the retained earnings statement for the year. (c) Prepare the stockholders’ equity section of the balance sheet as of October 31. (d) Prepare closing entries.
I could really use some help with the first half of this problem
Curtis’s Coffee Cookie Creations
Cash $7,500 $11,630
Inventory 450 1,200
Equipment 2,500 1,000*
*Cookie Creations decided not to buy the delivery van considered in Chapter 9.
Combining forces will also allow Natalie and Curtis to pool their resources and buy a few more assets to run their new business venture. Curtis and Natalie then meet with a lawyer and form a corporation on November 1, 2023, called Cookie & Coffee Creations Inc. The articles of incorporation state that there will be two classes of shares that the corporation is authorized to issue: common shares and
CC11 (Continued)
The assets held by each of their businesses will be transferred into the corporation at current market value. Curtis will receive 10,550 common shares, and Natalie will receive 14,630 common shares in the corporation. Therefore, the shares have a fair value of $1 per share.
Natalie and Curtis are very excited about this new business venture. They come to you with the following questions:
- “Curtis’s dad and Natalie’s grandmother are interested in investing $5,000 each in the business venture. We are thinking of issuing them preferred shares. What would be the advantage of issuing them preferred shares instead of common shares?”
- 2. “Our lawyer has sent us a bill for $750. When we discussed the bill with her, she indicated that she would be willing to receive common shares in our new corporation instead of cash for her se We would be happy to issue her shares, but we’re a bit worried about accounting for this transaction. Can we do this? If so, how do we determine how many shares to give her?”
Instructions
(a) Answer their questions.
(b) Prepare the
(c) Assume that Cookie & Coffee Creations Inc. issues 1,000 $0.50 noncumulative preferred shares to Curtis’s dad and the same number to Natalie’s grandmother, in both cases for $5,000. Also assume that Cookie & Coffee Creations Inc. issues 750 common shares to its lawyer. Prepare the journal entries for each of these transactions. They all occurred on November 1.
(d) Prepare the opening
CC11 (Continued)
Part 2
After establishing their company’s fiscal year-end to be October 31, Natalie and Curtis begin operating Cookie & Coffee Creations Inc. on November 1, 2023. On that date, after the issuance of shares, the paid-in capital section of the company’s balance sheet is as follows.
Paid-in capital
Preferred stock, $0.50 noncumulative, no par value,
10,000 shares authorized, 2,000 shares issued $10,000
Common stock, no par value, 100,000 shares
authorized, 25,930 shares issued 25,930
Cookie & Coffee Creations then has the following selected transactions during its first year of operations.
Dec. 1 Issues an additional 800 preferred shares to Natalie’s brother for $4,000.
Apr. 30 Declares a semiannual dividend to the preferred stockholders of record on May 15, payable on June 1.
June 30 Repurchases 750 shares of common stock issued to the lawyer, for $500. Recall that these were originally issued for $750. The lawyer had decided to retire and wanted to liquidate all of her assets.
Oct. 31 The company has had a very successful first year of operations. It earned revenues of $462,500 and incurred expenses of $364,050 (including $750 legal fee, but excluding income tax).
31 Records income tax expense. (The company has a 20% income tax rate.)
31 Declares a semiannual dividend to the preferred stockholders of record on November 15, payable on December 1.
Instructions
(a) Prepare the journal entries to record the above transactions.
(b) Prepare the
(c) Prepare the
(d) Prepare closing entries.
![### Cookie & Coffee Creations Inc. Balance Sheet
**Date:** November 1, 2023
---
#### Assets
*(List of assets with lines for data entry)*
- [Line for Asset 1]
- [Line for Asset 2]
- [Line for Asset 3]
- [Line for Asset 4]
- [Additional lines for more assets]
---
#### Stockholders' Equity
*(List of equity items with lines for data entry)*
- [Line for Equity 1]
- [Line for Equity 2]
- [Line for Equity 3]
- [Additional lines for more equity items]
---
**Instructions:**
- Fill in each line with the corresponding financial data as required.
- Ensure accurate entries to maintain financial integrity.
- Use additional sheets if necessary for more entries.
**Notes:**
- This balance sheet is designed for educational purposes to help understand financial statements structure.
- It is essential for learners to familiarize themselves with common accounting terms and their correct placements in a balance sheet.
**Worksheet Header:**
- **Name:** [Space to write]
- **Section:** [Space to write]
- **Date:** [Space to write]
*(Ensure to fill out these details before starting your entry)*](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0b0ab463-4d4c-475b-97de-464c7d60d430%2F43bfbe21-5569-4c2d-904f-375b34d1d8ca%2Fvdtiwi_processed.png&w=3840&q=75)
![**Educational Website Text Transcription**
---
**Name:**
**Section:**
**Date:**
---
**Assignment CC11:**
**Cookie & Coffee Creations Inc.**
---
**Part 1:**
1. **(a) 1.**
* [Lines for input]
2.
---
**Journal Entry Section:**
- **Columns:**
- **Date**
- Nov. 1
- (additional space for dates)
- **Account Titles**
- (space for listing accounts)
- **Debit**
- (space for debit entries)
- **Credit**
- (space for credit entries)
- **Instructions:**
- Fill in the account titles, and record the appropriate debit and credit entries for each transaction.
---
Use this template to practice recording financial transactions following the principles of double-entry accounting. Make sure that the total debits equal the total credits in each transaction.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0b0ab463-4d4c-475b-97de-464c7d60d430%2F43bfbe21-5569-4c2d-904f-375b34d1d8ca%2Fg6jwg_processed.png&w=3840&q=75)
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