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CCC11 CONTINUING COOKIE CHRONICLE
Part 1
(a) 1. One of the major advantages of issuing preferred stock is that
the preferred stockholder does not have voting rights. In this
2. The advantages of offering your family cumulative preferred stock
is that when dividends were declared, the preferred stockholders
would receive dividends both for the current year and for years in
3. It is possible to pay for the $750 legal bill by issuing common stock.
However, the historical cost principle still applies. Cost must
equal the cash equivalent price which is generally the fair value of
the consideration given up. If this amount cannot be determined,
we then look to the fair value of the consideration received to
CONTINUING COOKIE CHRONICLE (Continued)
General Journal
Date
Account Titles
Debit
Credit
(b)
2018
Nov. 1
Cash ...................................................................
19,500
Accounts Receivable ........................................
600
(c)
Nov. 1
Cash ...................................................................
10,000
CONTINUING COOKIE CHRONICLE (Continued)
(d) COOKIE & COFFEE CREATIONS INC.
Balance Sheet
November 1, 2018
Assets
Current assets
Cash .......................................................................
$29,500
Accounts receivable .............................................
600
Stockholders’ Equity
Capital stock
Preferred stock, no-par value, $6, cumulative,
10,000 shares authorized, 2,000 shares issued
and outstanding ....................................................
$10,000
CONTINUING COOKIE CHRONICLE (Continued)
Part 2
(a) General Journal
Date
Account Titles
Debit
Credit
2019
Jan. 1
Cash .......................................................................
4,000
Preferred Stock ...........................................
4,000
June 30
Treasury Stock .....................................................
500
Cash .............................................................
500
(b) General Journal
Date
Account Titles
Debit
Credit
2019
Oct. 31
Revenues ...............................................................
472,500
Income Summary ........................................
472,500
CONTINUING COOKIE CHRONICLE (Continued)
(c) COOKIE & COFFEE CREATIONS INC.
Retained Earnings Statement
For the Year Ended October 31, 2019
Balance, November 1, 2018 ....................................
$ –
Add: Net income ....................................................
44,800
(d) COOKIE & COFFEE CREATIONS INC.
Partial Balance Sheet
October 31, 2019
Stockholders’ equity
Paid-in capital
Capital stock
Preferred stock, no-par value, $6,
cumulative, 10,000 authorized,
2,800 shares issued and outstanding .........
$14,000
