Prepare the opening balance sheet for Cookie & Coffee Creations Inc. as of November 1, 2020, including the journal entries and (c) above. (List current assets in order of liquidity. Enter the account name only and do not provide the descriptive information provided in the question.) Current Assets Cash Accounts Receivable Inventory Total Current Assets COOKIE & COFFEE CREATIONS INC. Balance Sheet Property, Plant and Equipment Equipment Total Assets Current Liabilities Preferred Stock Common Stock Total Liabilities Stock Dividends November 1, 2020 Assets Stockholders' Equity 28380 900 1650 30930 3500 34430 10000 750 10750 ° Total Stockholders' Equity 25180 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. Curtis has operated his coffee shop for 2 years. He buys coffee, muffins, and cookies from a local supplier. Natalie's business consists of giving cookie-making 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. The current market values of the assets of both businesses are as follows. 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, 2020, 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. 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.
Prepare the opening balance sheet for Cookie & Coffee Creations Inc. as of November 1, 2020, including the journal entries and (c) above. (List current assets in order of liquidity. Enter the account name only and do not provide the descriptive information provided in the question.) Current Assets Cash Accounts Receivable Inventory Total Current Assets COOKIE & COFFEE CREATIONS INC. Balance Sheet Property, Plant and Equipment Equipment Total Assets Current Liabilities Preferred Stock Common Stock Total Liabilities Stock Dividends November 1, 2020 Assets Stockholders' Equity 28380 900 1650 30930 3500 34430 10000 750 10750 ° Total Stockholders' Equity 25180 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. Curtis has operated his coffee shop for 2 years. He buys coffee, muffins, and cookies from a local supplier. Natalie's business consists of giving cookie-making 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. The current market values of the assets of both businesses are as follows. 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, 2020, 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. 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Prepare the opening balance sheet for Cookie & Coffee Creations Inc. as of November 1, 2020, including the journal entries
and (c) above. (List current assets in order of liquidity. Enter the account name only and do not provide the descriptive information
provided in the question.)
Current Assets
Cash
Accounts Receivable
Inventory
Total Current Assets
COOKIE & COFFEE CREATIONS INC.
Balance Sheet
Property, Plant and Equipment
Equipment
Total Assets
Current Liabilities
Preferred Stock
Common Stock
Total Liabilities
Stock Dividends
November 1, 2020
Assets
Stockholders' Equity
28380
900
1650
30930
3500
34430
10000
750
10750
°
Total Stockholders' Equity
25180
Transcribed Image Text: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.
Curtis has operated his coffee shop for 2 years. He buys coffee, muffins, and cookies from a local supplier. Natalie's business consists
of giving cookie-making 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.
The current market values of the assets of both businesses are as follows.
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, 2020, 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.
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.
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