Assignment
Continuing Cookie Chronicle (1)
CCC1 Natalie Koebel spent much of her childhood learning the art of cookie-making from her grandmother. They spent many happy hours mastering every type of cookie imaginable and later devised new recipes that were both healthy and delicious. Now at the start of her second year in college, Natalie is investigating possibilities for starting her own business as part of the entrepreneurship program in which she is enrolled.
A long-time friend insists that Natalie has to include cookies in her business plan. After a series of brainstorming sessions, Natalie settles on the idea of operating a cookie-making school. She will start on a part-time basis and offer her services in people's homes. Now that she has started thinking about it, the possibilities seem endless. During the fall, she will concentrate on holiday cookies. She will offer group sessions (which will probably be more entertainment than education) and individual lessons. Natalie also decides to include children in her target market. The first difficult decision is coming up with the perfect name for her business. She settles on "Cookie Creations," and then moves on to more important issues.
Instructions
(a) What form of business organization-proprietorship, partnership, or corporation- do you recommend that Natalie use for her business? Discuss the benefits and weaknesses of each form that Natalie might consider.
(b) Will Natalie need accounting information? If yes, what information will she need and why? How often will she need this information?
(c) Identify specific asset, liability, revenue, and expense accounts that Cookie Creations will likely use to record its business transactions.
(d) Should Natalie open a separate bank account for the business? Why or why not?
(e) Natalie expects she will have to use her car to drive to people's homes and to pick up supplies, but she also needs to use her car for personal reasons. She recalls from her first-year accounting course something about keeping business and personal assets separate. She wonders what she should do for accounting purposes. What do you recommend?
Continuing Cookie Chronicle
(Note: This is a continuation of the Cookie Chronicle from Chapter 1.)
CCC2 After investigating the different forms of business organization, Natalie Koebel decides to operate her business as a corporation, Cookie Creations Inc., and she begins the process of getting her business running.
While at a trade show, Natalie is introduced to Gerry Richards, operations manager of "Biscuits," a national food retailer. After much discussion, Gerry asks Natalie to consider being Biscuits' major supplier of oatmeal chocolate chip cookies. He provides Natalie with the most recent copy of the financial statements of Biscuits. He expects that Natalie will need to supply Biscuits' Watertown warehouse with approximately 1,500 dozen cookies a week. Natalie is to send Biscuits a monthly invoice, and she will be paid approximately 30 days from the date the invoice is received in Biscuits' Chicago office.
Natalie is thrilled with the offer. However, she has recently read in the newspaper that Biscuits has a reputation for selling cookies and donuts with high amounts of sugar and fat, and as a result, consumer demand for the company's products has decreased.
Instructions
Natalie has several questions. Answer the following questions for Natalie.
(a) What type of information does each financial statement provide?
(b) What financial statements would Natalie need in order to evaluate whether Biscuits will have enough cash to meet its current liabilities? Explain what to look for.
(c) What financial statements would Natalie need in order to evaluate whether Biscuits will be able to survive over a long period of time? Explain what to look for.
(d) What financial statement would Natalie need in order to evaluate Biscuits' profitability? Explain what to look for.
(e) Where can Natalie find out whether Biscuits has outstanding debt? How can Natalie determine whether Biscuits would be able to meet its interest and debt payments on any debts it has?
(f) How could Natalie determine whether Biscuits pays a dividend?
(g) In deciding whether to go ahead with this opportunity, are there other areas of concern that Natalie should be aware of?
Continuing Cookie Chronicle
(Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 6.)
CCC7 Part 1 Natalie is struggling to keep up with the recording of her accounting transactions. She is spending a lot of time marketing and selling mixers and giving her cookie classes. Her friend John is an accounting student who runs his own accounting service. He has asked Natalie if she would like to have him do her accounting.
John and Natalie meet and discuss her business. John suggests that he do the following for Natalie.
1. Hold onto cash until there is enough to be deposited. (He would keep the cash locked up in his vehicle). He would also take all of the deposits to the bank at least twice a month.
2. Write and sign all of the checks.
3. Record all of the deposits in the accounting records.
4. Record all of the checks in the accounting records.
5. Prepare the monthly bank reconciliation.
6. Transfer all of Natalie's manual accounting records to his computer accounting program. John maintains all of the accounting information that he keeps for his clients on his laptop computer.
7. Prepare monthly financial statements for Natalie to review.
8. Write himself a check every month for the work he has done for Natalie.
Continuing Cookie Chronicle
(Note: This is a continuation of the Cookie Chronicle from Chapters 1 through 7.)
CCC8 One of Natalie's friends, Curtis Lesperance, runs a coffee shop where he sells specialty coffees and prepares and sells muffins and cookies. He is eager to buy one of Natalie's fine European mixers, which would enable him to make larger batches of muffins and cookies. However, Curtis cannot afford to pay for the mixer for at least 30 days. He asks Natalie if she would be willing to sell him the mixer on credit.
Natalie comes to you for advice and asks the following questions.
1. "Curtis has provided me with a set of his most recent financial statements. What calculations should I do with the data from these statements, and how will the results help me decide if I should extend credit to Curtis?"
2. "Is there an alternative other than extending credit to Curtis for 30 days?"
3. "I am thinking seriously about permitting my customers to use credit cards. What are some of the advantages and disadvantages of letting my customers pay by credit card?"
The following transactions occurred in June through August.
June. 1 After much thought, Natalie sells a mixer to Curtis on credit, terms n/30, for $1,100 (cost of mixer $600).
2 Natalie meets with the bank manager and arranges to get access to a credit card account. The terms of credit card transactions are 3% of the sales transactions and a monthly equipment rental charge of $75.
30 Natalie teaches 13 classes in June. Seven classes were paid for in cash, $1,050; the other six classes were paid for by credit card, $900.
30 Natalie receives and reconciles her bank statement. She makes sure that the bank has correctly processed the monthly $75 charge for the rental of the credit card equipment and the 3% fee on the credit card transactions.
30 Curtis calls Natalie. He is unable to pay the amount outstanding for another month, so he signs a one-month, 6% note receivable.
July. 15 Natalie sells a mixer to a friend of Curtis's. The friend pays $1,100 for the mixer by credit card (cost of mixer $600).
30 Natalie teaches 16 classes in July. Eight classes are paid for in cash, $1,200; eight classes are paid for by credit card, $1,200.
31 Natalie reconciles her bank statement and makes sure the bank has recorded the correct amounts for the rental of the credit card equipment and the credit card sales.
31 Curtis calls Natalie. He cannot pay today but hopes to have a check for her at the end of the week. Natalie prepares the appropriate journal entry.
Aug. 10 Curtis calls again and promises to pay at the end of August, including interest for 2 months.
31 Natalie receives a check from Curtis in payment of his balance plus interest outstanding.
Instructions
(a) Answer Natalie's questions.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also include a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also Include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.
Attachment:- Gordon-Damon-Unit-3-Assignment.rar