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After researching the different forms of business organization, Natalie Koebel decides to operate Cookie Creations as a corporation. She then starts the process of getting
After researching the different forms of business organization, Natalie Koebel decides to operate Cookie Creations as a corporation. She then starts the process of getting the business running. In November 2018, the following activities take place.
Nov. 8 | Natalie cashes her U.S. Savings Bonds and receives $520, which she deposits in her personal bank account. | |
8 | She opens a bank account under the name Cookie Creations and transfers $500 from her personal account to the new account in exchange for common stock. | |
11 | Natalie pays $65 to have advertising brochures and posters printed. She plans to distribute these as opportunities arise. (Hint: Use Advertising Expense.) | |
13 | She buys baking supplies, such as flour, sugar, butter, and chocolate chips, for $125 cash. | |
14 | Natalie starts to gather some baking equipment to take with her when teaching the cookie classes. She has an excellent top-of-the-line food processor and mixer that originally cost her $750. Natalie decides to start using it only in her new business. She estimates that the equipment is currently worth $300. She invests the equipment in the business in exchange for common stock. | |
16 | Natalie realizes that her initial cash investment is not enough. Her grandmother lends her $2,000 cash, for which Natalie signs a note payable in the name of the business. Natalie deposits the money in the business bank account. (Hint: The note does not have to be repaid for 24 months. As a result, the notes payable should be reported in the accounts as the last liability and also on the balance sheet as the last liability.) | |
17 | She buys more baking equipment for $900 cash. | |
20 | She teaches her first class and collects $125 cash. | |
25 | Natalie books a second class for December 4 for $150. She receives $30 cash in advance as a down payment. | |
30 | Natalie pays $1,320 for a one-year insurance policy that will expire on December 1, 2019. |
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