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CHAPTER 1
Cookie Creations
CC1 Natalie Koebel spent much of her childhood learning the art of cookie-making
from her grandmother. They passed many happy hours mastering every type of cookie
imaginable and later creating new recipes that were both healthy and delicious. Now at
the start of her second year in college, Natalie is investigating various possibilities for
starting her own business as part of the requirements of the entrepreneurship program in
which she is enrolled.
A long-time friend insists that Natalie has to somehow 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
individual lessons and group sessions (which will probably be more entertainment than
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 and give the reasons for your choice.
(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, and owner’s equity 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?
