background info
background info
background info
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Because Natalie has been so successful with Cookie Creations 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, and because of the advantage of limited personal liability, decide to form a new corporation. Curtis has operated his coffee shop for 2 years. He buys colfee, 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 as a location for her cookie-making classes and demonstrations of the mixers that she sells. Natalie will also hire, train, and supervise staff hired to bake cookies and muffins sold in the coffee shop. By offering her classes on the premises. Natalie will save on travel, and the coffee shop will provide one central location for selling the mixers. Combining forces will also allow Natalie and Curtis to pool their resources and buy a few more assets to run their new business venture. The current market values of the assets of both businesses are as follows. Curtis and Natalie meet with a lawyer and form their corporation, called Cookie \& Coffee Creations Inc, on November 1, 2021. The new corporation is authorized to issuc 50,000 shares of $1 par common stock and 10,000 shares of no par, $6 cumulative preferred stock. The assets held by each business will be transferred into the corporation at current market value of $1 per share. Curtis will receive 10,550 common shares, and Natalie will receive 14,630 common shares in the corporation. (b) Prepare the journal entries required on November 1,2021, 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. If no entry is required, select "No Entry" for the account tittes and enter o for the amounts.) Assume that Cookie \& Coffee Creations Inc, issues 1,000$6 cumulative preferred shares to Curtis' Dad and the same number to Natalie's grandmother, in both cases for $5,000. Also assume that Cockie 8 . Coffee Creations Inc issces 750 common shares to its Iawyer. Prepare the journal entries required for each of these transactions that also occurred on November 1 . (Credit account tities are automatically indented when amount is entered. Do not indent manually.) Prepare the opening balance sheet for Cookie \& Coffee Creations Inc. as of November 1,2021, including the journal entries in (b) and (c) above. (List Current assets in order of liquidity. For preferred stock and common stock enter the account name only and do not provide the descriptive information provided in the question.) Stockholders' Equity $ 5 's' Equity $[ s Capital Stock Current Assets Current Liabilities Intangible Assets Long-term Investments Long-term Liabilities Property, Plant and Equipment Retained Earnings Stockholders' Equity Total Assets Total Capital Stock Total Current Assets Total Current Liabilities Total Intangible Assets Total Liabilities Total Long-term Investments Total Long-term Liabilities Total Property, Plant and Equipment Total Stockholders' Equity
