Instructions () Answer their questions. (b) Prepare the journal entries required on November 1, 2023, the date when Natale and Curtis transfer the assets of their respective businesses inte Cookie & Coffee Creations Inc. (e) Assume that Cookie & Coffee Creations Inc. issues 1,000 s0.50 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
Instructions () Answer their questions. (b) Prepare the journal entries required on November 1, 2023, the date when Natale and Curtis transfer the assets of their respective businesses inte Cookie & Coffee Creations Inc. (e) Assume that Cookie & Coffee Creations Inc. issues 1,000 s0.50 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
I need help with just part A which is ONE question thank you attached is instructions and and the excel papers thanks :)
![IcC11
CONTINUING CASE: COOKIE CREATIONS
CC11 (Continued)
C11 (Continued)
Part 2
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.
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.
Natalie and her friend Curtis Lesperance decide that they can benefit from
joining Cookie Creations and Curtis's coffee shop. In the first part of this
problem, they come to you with questions about setting up a corporation
for their new business. In the second part of the problem, they want your
help in preparing financial information following the first year of operations
of their new business, Cookie & Coffee Creations.
questions:
1. "Curtis's dad and Natalie's grandmother are interested in
investing $5,000 each in the business venture. We are thinking of
They come to you with the following
Paid-in capital
Preferred stock, $0.50 noncumulative, no par value,
10,000 shares authorized, 2,000 shares issued
Common stock, no par value, 100,000 shares
authorized, 25,930 shares issued
$10,000
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
her, she indicated that she would be willing to receive
Part 1
Curtis has operated his coffee shop for 2 years. He buys coffee, muffins,
cookies from a local supplier. Natalie's business consists of giving
cookie-mpking classes and selling fine European mixers. The plan is for
Natalie to use the premises Curtis currently rents to give her cookie-
making classes and demonstrations of the mixers that she sells. Natalie
will also hire, train, and supervise staff to bake the cookies and muffins
sold in the coffee shop. By offering her classes on the premises, Natalie
will save on travel time going from one place to another. Another
advantage is that the coffee shop will have one central location for selling
the mixers.
25,930
common shares in our new corporation instead of cash for her
Cookie & Coffee Creations then has the following selected transactions
services. We would be happy to issue her shares, but we're a bit
during its first year of operations.
worried about accounting for this transaction. Can we do this? If
so, how do we determine how many shares to give her?"
Dec.
Issues an additional 800 preferred shares to Natalie's
brother for $4,000.
Apr. 30
Declares
semiannual dividend
to
the preferred
a
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
stockholders of record on May 15, payable on June 1.
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.
June 30
The current market values of the assets of both businesses are as
follows.
businesses into Cookie & Coffee Creations Inc.
Curtis's Coffee
(c) Assume that Cookie & Coffee Creations Inc. issues 1,000 $0.50
Oct. 31
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).
Records income tax expense. (The company has a 20%
Cookie Creations
The
noncumulative preferred shares to Curtis's dad and the same
number to Natalie's grandmother, in both cases for $5,000. Also
Cash
$7,500
$11,630
Accounts receivable
100
800
Inventory
Equipment
450
1,200
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.
2,500
1,000*
31
*Cookie Creations decided not to buy the delivery van considered in
Chapter 9.
(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.
income tax rate.)
Declares
stockholders of record on November 15, payable on
31
a
semiannual dividend
to
the preferred
December 1.
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
Instructions
(a) Prepare the journal entries to record the above transactions.
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.
(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.
Copyright © 2020 Jahn Wiley & Sons, Inc. NA Financial Accounting, 11e, Continuing Case: Coakie Creations
(For instructor Use Oniy)
Copyright © 2020 Jahn Wiley & Sons, Inc.
NANA Financial Accounting, 11e, Continuing Case: Coakie Creations
(For Inatructor Use Only)
© 2020 John W iley & Sons, Inc. All rights reserved. No part of this publication m ay be reproduced, atored in a retrieval syatem, or tranamitted,
in any form ar by any means, electronie, mechanical, pha tocopying, recording or otherwise, except as permitted by law. Advice an how to
obtain permisasion to reuse this material is available at htlp/www.wiley.com igo/permiasions.
11-2
11-3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0b0ab463-4d4c-475b-97de-464c7d60d430%2F34c9ba7c-2334-4449-8c5b-9e20c4646e70%2F3ff7h0h_processed.png&w=3840&q=75)
Transcribed Image Text:IcC11
CONTINUING CASE: COOKIE CREATIONS
CC11 (Continued)
C11 (Continued)
Part 2
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.
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.
Natalie and her friend Curtis Lesperance decide that they can benefit from
joining Cookie Creations and Curtis's coffee shop. In the first part of this
problem, they come to you with questions about setting up a corporation
for their new business. In the second part of the problem, they want your
help in preparing financial information following the first year of operations
of their new business, Cookie & Coffee Creations.
questions:
1. "Curtis's dad and Natalie's grandmother are interested in
investing $5,000 each in the business venture. We are thinking of
They come to you with the following
Paid-in capital
Preferred stock, $0.50 noncumulative, no par value,
10,000 shares authorized, 2,000 shares issued
Common stock, no par value, 100,000 shares
authorized, 25,930 shares issued
$10,000
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
her, she indicated that she would be willing to receive
Part 1
Curtis has operated his coffee shop for 2 years. He buys coffee, muffins,
cookies from a local supplier. Natalie's business consists of giving
cookie-mpking classes and selling fine European mixers. The plan is for
Natalie to use the premises Curtis currently rents to give her cookie-
making classes and demonstrations of the mixers that she sells. Natalie
will also hire, train, and supervise staff to bake the cookies and muffins
sold in the coffee shop. By offering her classes on the premises, Natalie
will save on travel time going from one place to another. Another
advantage is that the coffee shop will have one central location for selling
the mixers.
25,930
common shares in our new corporation instead of cash for her
Cookie & Coffee Creations then has the following selected transactions
services. We would be happy to issue her shares, but we're a bit
during its first year of operations.
worried about accounting for this transaction. Can we do this? If
so, how do we determine how many shares to give her?"
Dec.
Issues an additional 800 preferred shares to Natalie's
brother for $4,000.
Apr. 30
Declares
semiannual dividend
to
the preferred
a
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
stockholders of record on May 15, payable on June 1.
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.
June 30
The current market values of the assets of both businesses are as
follows.
businesses into Cookie & Coffee Creations Inc.
Curtis's Coffee
(c) Assume that Cookie & Coffee Creations Inc. issues 1,000 $0.50
Oct. 31
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).
Records income tax expense. (The company has a 20%
Cookie Creations
The
noncumulative preferred shares to Curtis's dad and the same
number to Natalie's grandmother, in both cases for $5,000. Also
Cash
$7,500
$11,630
Accounts receivable
100
800
Inventory
Equipment
450
1,200
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.
2,500
1,000*
31
*Cookie Creations decided not to buy the delivery van considered in
Chapter 9.
(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.
income tax rate.)
Declares
stockholders of record on November 15, payable on
31
a
semiannual dividend
to
the preferred
December 1.
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
Instructions
(a) Prepare the journal entries to record the above transactions.
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.
(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.
Copyright © 2020 Jahn Wiley & Sons, Inc. NA Financial Accounting, 11e, Continuing Case: Coakie Creations
(For instructor Use Oniy)
Copyright © 2020 Jahn Wiley & Sons, Inc.
NANA Financial Accounting, 11e, Continuing Case: Coakie Creations
(For Inatructor Use Only)
© 2020 John W iley & Sons, Inc. All rights reserved. No part of this publication m ay be reproduced, atored in a retrieval syatem, or tranamitted,
in any form ar by any means, electronie, mechanical, pha tocopying, recording or otherwise, except as permitted by law. Advice an how to
obtain permisasion to reuse this material is available at htlp/www.wiley.com igo/permiasions.
11-2
11-3
![Nar.
CC11 Continued
Section
Date
Cookie & Coffee Creations Inc.
(d)
Cookie & Coffee Creations Inc.
Balance Sheet
November 1, 2023
Assets
2
2
3
3
4
14
5
6
7
7
8
9
8
19
10
10
11
Stockholders' Equity
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12
13
14
15||
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17
18
19
20
13
14
15
16
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18
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Transcribed Image Text:Nar.
CC11 Continued
Section
Date
Cookie & Coffee Creations Inc.
(d)
Cookie & Coffee Creations Inc.
Balance Sheet
November 1, 2023
Assets
2
2
3
3
4
14
5
6
7
7
8
9
8
19
10
10
11
Stockholders' Equity
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