Prepare the opening balance sheet for Cookie & Coffee Creations Inc. as of November 1, 2020, including the journal entriesand (c) above. (List current assets in order of liquidity. Enter the account name only and do not provide the descriptive informationprovided in the question.)Current AssetsCashAccounts ReceivableInventoryTotal Current AssetsCOOKIE & COFFEE CREATIONS INC.Balance SheetProperty, Plant and EquipmentEquipmentTotal AssetsCurrent LiabilitiesPreferred StockCommon StockTotal LiabilitiesStock DividendsNovember 1, 2020AssetsStockholders' Equity283809001650309303500344301000075010750°Total Stockholders' Equity25180 Natalie and her friend Curtis Lesperance decide that they can benefit from joining Cookie Creations and Curtis's coffee shop. In thefirst part of this problem, they come to you with questions about setting up a corporation for their new business.Curtis has operated his coffee shop for 2 years. He buys coffee, muffins, and cookies from a local supplier. Natalie's business consistsof giving cookie-making classes and selling fine European mixers. The plan is for Natalie to use the premises Curtis currently rents togive her cookie-making classes and demonstrations of the mixers that she sells. Natalie will also hire, train, and supervise staff to bakethe cookies and muffins sold in the coffee shop. By offering her classes on the premises, Natalie will save on travel time going from oneplace to another. Another advantage is that the coffee shop will have one central location for selling the mixers.The current market values of the assets of both businesses are as follows.Curtis's CoffeeCookie CreationsCash$7,500$11,630Accounts receivable100800Inventory4501,200Equipment2,5001,000*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 businessventure.Curtis and Natalie then meet with a lawyer and form a corporation on November 1, 2020, called Cookie & Coffee Creations Inc. Thearticles of incorporation state that there will be two classes of shares that the corporation is authorized to issue: common shares andpreferred shares. They authorize 100,000 no-par shares of common stock, and 10,000 no-par shares of preferred stock with a $0.50noncumulative dividend.The assets held by each of their businesses will be transferred into the corporation at current market value. Curtis will receive 10,550common shares, and Natalie will receive 14,630 common shares in the corporation. Therefore, the shares have a fair value of $1 pershare.Natalie and Curtis are very excited about this new business venture.

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Answered: Prepare the opening balance sheet for…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Bramble Inc., had the following condensed balance sheet at the end of operations for 2019. BRAMBLE INC.BALANCE SHEETDECEMBER 31, 2019 Cash $8,500 Current liabilities $15,000 Current assets other than cash 29,100 Long-term notes payable 25,700 Equity invesments 19,900 Bonds payable 25,000 Plant assets (net) 66,800 Common stock 75,000 Land 39,700 Retained earnings 23,300 $164,000 $164,000 During 2020, the following occurred. 1. A tract of land was purchased for $9,100. 2. Bonds payable in the amount of $15,000 were redeemed at par. 3. An additional $9,900 in common stock was issued at par. 4. Dividends totaling $9,300 were paid to stockholders. 5. Net income was $30,500 after allowing depreciation of $13,700. 6. Land was purchased through the issuance of $22,400 in bonds. 7. Bramble Inc. sold part of its investment portfolio for $13,000. This transaction resulted in a gain…
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Subject:Accounting
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