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After establishing their company’s fiscal year-end to be October 31, Natalie and Curtis began operating Cookie...

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Accounting

After establishing their company’s fiscal year-end to be October31, Natalie and Curtis began operating Cookie & CoffeeCreations Inc. on November 1, 2018. The company had the followingselected transactions during its first fiscal year ofoperations.

Jan.    1 Issued an additional 800 preferredshares to Natalie’s brother for $4,000 cash.

June. 30 Repurchased 750 shares issued to the lawyer, for $500cash. The lawyer had decided to retire and wanted to liquidate allof her assets.

Oct.   15 The company had a very successful first yearof operations and as a result declared dividends of $28,000,payable November 15, 2019. (Indicate the amounts payable to thepreferred stockholders and to the common stockholders.)

Oct.   31 The company earned revenues of $472,500 andincurred expenses of $416,500 (including the $750 legal expensefrom November 1 but excluding income tax). Record income taxexpense, assuming the company has a 20% income tax rate.

Instructions:

(a) Prepare the journal entries to record each of the abovetransactions.

(b) Prepare all of the closing entries required on October 31,2019.

(c) Prepare the retained earnings statement for the year endedOctober 31, 2019.

(d) Prepare the stockholders’ equity section of the balancesheet as of October 31, 2019.

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