Question

This is all one question. Please help me. Thank you ??

Cookie Creations 12 Natalie's high school friend, Katy Peterson, has been operating a bakery for approximately 18 months. Because Natalie has been so successful operating Continuing Cookie Chronicle, Katy would like to have Natalie become her partner, Katy believes that together they will create a thriving cookie-making business. Natalie is quite happy with her current business set up. Until now, she had not considered joining forces with anyone. However, Natalie thinks that it may be a good idea to establish a partnership with Katy, and decides to look into it. From past meetings with Katy, Natalie has gathered the following information about Katy's business and compared it to her own results. The current market values of the assets and liabilities of both businesses are as follow. The Baker's Nook Continuing Cookie Chronicle Cash $1,500 Accounts receivable 6,000 Allowance for doubtful accounts (750) Inventory 1,200 Equipment 7,500 1,000 Notes Payable (bank loan) 10,000 900 All assets would be transferred into the partnership. The partnership would assume all of the abilities of the two proprietorships. The bank loan (notes payable) is due February 17, 2018 Additional information: • Katy operates her business from leased premises. She has just signed a lease for 12 months. Monthly rent will be $1,000. Katy's landlord has agreed to draw up a new lease agreement that would be signed by both partners • Katy graduated from cooking school. She has no personal assets and a lot of student loans and credit card debt. Natalie's personal assets consist of investments in personal U.S. Savings Bonds. Natalie has no personal liabities. • Katy is reluctant to have a partnership agreement drawn up. She thinks it's a waste of both time and money. As Katy and Natalie have been friends for a long time. Katy is confident that any problems that arise can be easily resolved over a nice meal

Answer 1

Capital Contributions:
	Katy	Natalie
Cash	1500	12000
Accounts receivable	6000	800
Allowance for doubtful accounts	-750	0
Inventory	450	1200
Equipment	7500	1000
Notes payable	-10000	0
Total	4700	15000
Additional cash	10300
Total capital contribution $	15000	15000

Katy have to borrow: $10300

Continuing Cookie Chronicle AND MORE
Balance Sheet
November 1, 2017
Assets
Current assets
Cash		23800
Accounts receivable	6800
Less: Allowance for doubtful accounts	750	6050
Inventory		1650
Total current assets		31500
Property, plant, and equipment
Equipment		8500
Total assets		40000
Liabilities and Owner's Equity
Current liabilities
Notes payable		10000
Owner's equity
Katy Peterson, capital	15000
Natalie, capital	15000
Total owner's equity		30000
Total liabilities and owner's equity		40000