Description Instructions For Cookie Creations Chapters 9 And

Description Instructions Cookie Creations Chapters 9 And 10 This As

This assignment will focus on the Cookie Creations case study from Chapter 9 (page 9-37) and Chapter 10 (page 10-42) of your textbook. There are two parts to this assignment. Review the case situations for each part, then complete the instructions.

Paper For Above instruction

Part I

Natalie’s friend Curtis Lesperance operates a coffee shop, selling specialty coffees, muffins, and cookies. Curtis wishes to purchase a European mixer from Natalie, which would allow him to prepare larger batches of baked goods. Curtis cannot pay for the mixer immediately and requests credit from Natalie. Curtis provides recent financial statements, and Natalie asks for advice regarding extending credit. She wants to know which financial calculations and questions to consider from the statements to assess Curtis’s creditworthiness. She also considers alternative payment options besides credit, such as credit card payments, weighing their advantages and disadvantages.

The relevant transactions include: In June 2020, Natalie sells Curtis a mixer on credit for $1,150. Curtis later signs a note receivable for one month at an 8.35% interest rate when he cannot pay on time. In July and August, Curtis’s payments are delayed, with Natalie recording a dishonored note and then receiving a check in August.

Natalie asks for a detailed analysis: the calculations to perform with Curtis’s financial data, questions to ask based on her analysis, and how this information influences her decision on extending credit. She also explores the possibility of accepting credit card payments, along with their pros and cons.

Students must answer Natalie's questions in a Word document. Additionally, prepare journal entries for the transactions in June, July, and August using an Excel spreadsheet. Transactions should be rounded to the nearest dollar, and a perpetual inventory system is used. Use the provided Part I Excel template for recording journal entries.

Part II

Natalie is considering purchasing a business-use van costing approximately $36,500, with an additional $2,500 for painting and $1,500 for removing the back seat and installing shelves. The van is expected to last five years, with an estimated salvage value of $7,500 at the end of its useful life. The van’s total expected mileage is 200,000 miles, with annual insurance costs of $2,400. She plans to acquire the van on August 15, 2020, with use starting September 1, 2020.

Natalie is concerned about how the van’s cost and depreciation will impact her financial statements. She asks for calculations of the van’s total cost and depreciation using three methods: straight-line, double-declining balance, and units-of-activity. She provides estimated miles driven per year for each method and wants to understand how each affects her income statement and balance sheet at December 31, 2020, as well as over the full five-year period. She seeks a recommendation on the most appropriate depreciation method based on these calculations.

Respond to these questions in the same Word document, ensuring responses for Part I and Part II are about one page each, totaling approximately two pages. Complete the journal entries for the transactions in Part I in an Excel spreadsheet using the provided template. Prepare the depreciation tables for Part II in another Excel spreadsheet. Submit the combined Word document and two Excel files to Blackboard, following APA formatting guidelines for the Word document.

References

  • Drury, C. (2018). Management and Cost Accounting (10th ed.). Cengage Learning.
  • Gibson, C. H. (2018). Financial Reporting & Analysis. Cengage Learning.
  • Horngren, C. T., Datar, S. M., & Rajan, M. (2019). Cost Accounting: A Managerial Emphasis (16th ed.). Pearson.
  • Hansen, D. R., & Mowen, M. M. (2018). Cost Management: A Strategic Emphasis (8th ed.). Cengage Learning.
  • Investopedia. (2023). Different Types of Depreciation. https://www.investopedia.com/terms/d/depreciation.asp
  • Kieso, D. E., Weygandt, J. J., & Warfield, T. D. (2020). Intermediate Accounting (16th ed.). Wiley.
  • Ross, S. A., Westerfield, R., & Jordan, B. D. (2019). Fundamentals of Corporate Finance (12th ed.). McGraw-Hill Education.
  • Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2019). Financial Accounting (11th ed.). Wiley.
  • Wild, J. J., Subramanyam, K. R., & Halsey, R. F. (2019). Financial Statement Analysis (12th ed.). Pearson.
  • Young, S. M., & Weiner, H. J. (2018). Cost Management: Measures and Metrics. Routledge.

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