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Cookie Creations 13 Natalie's friend, Curtis Lesperance, decides to meet with Natalie after hearing that her discussions about a possible business partnership with her friend Katy Peterson have failed. (Natalie had decided that forming a partnership with Katy, a high school friend, would hurt their friendship. Natalie had also concluded that she and Katy were not compatible to operate a business venture together.) Because Natalie has been so successful with Continuing Coolde Chronicle and Curtis has been just as successful with his coffee shop, they both conclude that they could benefit from each other's business expertise. Curtis and Natalie next evaluate the different types of business organization. Because of the advantage of limited personal liability, they decide to forma corporation Curtis has operated his coffee shop for 2 years. He buys coffee, mutns, 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 cooking-making classes and demonstrations of the movers 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. $12.000 The current market values of the assets of both businesses are as follows. Curtis's Coffee Continuing Cookie Chronide $7.130 Accounts receivable 800 Inventory 1,200 Equipment 2.500 1.000- 450 *Continuing Cookie Chronicle decided not to buy the delivery van considered in Chapter 10 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 forma corporation on November 1, 2017, called Cookies 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 por shares of preferred stock with a $0.50 no cumulative dividend. The assets held by each of their sole proprietorships will be transferred into the corporation at current market value Curtis will receive 10, 180 common shares, and Natalie we receive Your answer is partially correct. Try again. Prepare the journal entries required on November 1, 2017, the date when Natalie and Curtis transfer the assets of their respective businesses into Cookie & Coffee Creations Inc. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Now 1 Cash Accounts Receivable 15000 Common Stock Your answer correct 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. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit Date Account Titles and Explanation Nov. 1 Cash T Preferred stock (To record issue of preferred stock) Nov. 1 Organization Expense Common Stock (To record issue of common shares to lawyer) .) liquidity. Enter the account name only and do not provide the descriptive Information provided in the Q COOKIE A COFFEE CREATIONS INC. Balance Sheet November 1, 2017 Assets T Current Assets Inventory 3500 T Equipment 29130 Cash 33530 Total Current Assets Current Liabilities 25930 Common Stock Stockholders' Equity Cookie Creations 13 Natalie's friend, Curtis Lesperance, decides to meet with Natalie after hearing that her discussions about a possible business partnership with her friend Katy Peterson have failed. (Natalie had decided that forming a partnership with Katy, a high school friend, would hurt their friendship. Natalie had also concluded that she and Katy were not compatible to operate a business venture together.) Because Natalie has been so successful with Continuing Coolde Chronicle and Curtis has been just as successful with his coffee shop, they both conclude that they could benefit from each other's business expertise. Curtis and Natalie next evaluate the different types of business organization. Because of the advantage of limited personal liability, they decide to forma corporation Curtis has operated his coffee shop for 2 years. He buys coffee, mutns, 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 cooking-making classes and demonstrations of the movers 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. $12.000 The current market values of the assets of both businesses are as follows. Curtis's Coffee Continuing Cookie Chronide $7.130 Accounts receivable 800 Inventory 1,200 Equipment 2.500 1.000- 450 *Continuing Cookie Chronicle decided not to buy the delivery van considered in Chapter 10 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 forma corporation on November 1, 2017, called Cookies 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 por shares of preferred stock with a $0.50 no cumulative dividend. The assets held by each of their sole proprietorships will be transferred into the corporation at current market value Curtis will receive 10, 180 common shares, and Natalie we receive Your answer is partially correct. Try again. Prepare the journal entries required on November 1, 2017, the date when Natalie and Curtis transfer the assets of their respective businesses into Cookie & Coffee Creations Inc. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Date Account Titles and Explanation Now 1 Cash Accounts Receivable 15000 Common Stock Your answer correct 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. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) Credit Date Account Titles and Explanation Nov. 1 Cash T Preferred stock (To record issue of preferred stock) Nov. 1 Organization Expense Common Stock (To record issue of common shares to lawyer) .) liquidity. Enter the account name only and do not provide the descriptive Information provided in the Q COOKIE A COFFEE CREATIONS INC. Balance Sheet November 1, 2017 Assets T Current Assets Inventory 3500 T Equipment 29130 Cash 33530 Total Current Assets Current Liabilities 25930 Common Stock Stockholders' Equity