a) b) c) d)
Cookie Creations (Note: This is a continuation of the Cookie Creations from Chapters 1 through 13.) CC14 After establishing their company's fiscal year-end to be October 31, Natalie and Curtis begin operating Cookie & Coffee Creations Inc. on November 1, 2020. 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. S0.50 noncumulative, no par value, 10,000 shares aphorized, 2,000 issued $10,000 Common stock, no par value, 100,000 shares authorized, 25,930 issued 25,930 Cookie & Coffee Creations then has the following selected transactions during its first year of operations. Dec 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 operating expenses of $370,000 (including $750 legal fee, but excluding income tax). 31 Records income tax expense. (The company has a 20% income tax rate.) Declares a semiannual dividend to the preferred stockholders of record on November 15, payable on December 1. Instructions 1 31 (a) Prepare the journal entries to record the above transactions. (b) Prepare the statement of retained earnings for the year. (c) Prepare the stockholders' equity section of the balance sheet as of October 31, 2021. (d) Prepare closing entries. (Use Operating Expenses and Income Tax Expense as the only expense accounts.) 3 K L M N O PORS Tu v w x y Z AA AB AC AD AE AF AG AH AI AJ AK AL AM AN AO AP AQ AR AS AT AU AV AW AX 1. Study Chapter 14's Cookie Creation Continuing Problem and do all parts (a)--(d). Data are given in tables below for formula reference. Table DT-01 Pald-in capital section of Cookie & Coffee Creations Inc.'s balance sheet at November 1, 2020 Pald-in capital Preferred stock. $0.50 noncumulative, no par value, 10,000 shares authorized 2,000 issued Common stock, no par value, 100,000 shares authorized, 25,930 issued 10,000.00 25,930.00 Table DT-02 Cookie & Coffee Creations Inc.'s selected transactions during its first year of operations. Dec 1 Issuance of 800 proferred shares for 4,000.00 Apr 30 Declaration of dividend to preferred stockholders of record or 15-05-2021 payable on 01-06-2021 June 3 Repurchase of 750 shares of common stock for 500.00 Notes: shares originally issued for 750.00 Oct 31 Total revenues earned 462,500.00 Total expenses 370,000.00 Subject to income tax rate of 20.00 % Declaration of dividend to preferred stockholders of record or 15-11-2021 payable on 01-12-2021
