CCC1 Natalie Koebel spent much of her childhood learning the art of cookie-making
from her grandmother. They spent many happy hours mastering every type of cookie
imaginable and later devised new recipes that were both healthy and delicious. Now at
the start of her second year in college, Natalie is investigating possibilities for starting
her own business as part of the entrepreneurship program in which she is enrolled.
A long-time friend insists that Natalie has to 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 peo-
ple’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 group sessions
(which will probably be more entertainment than education) and individual lessons.
Natalie also decides to include children in her target market. The first difficult deci-
sion is coming up with the perfect name for her business. She settles on “Cookie
Creations,” and then moves on to more important issues.
Instructions
(a) What form of business organization—proprietorship, partnership, or corporation—
do you recommend that Natalie use for her business? Discuss the benefits and weak-
nesses of each form that Natalie might consider.
(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, revenue, and expense 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?
(e) Natalie expects she will have to use her car to drive to people’s homes and to pick up
supplies, but she also needs to use her car for personal reasons. She recalls from her
first-year accounting course something about keeping business and personal assets
separate. She wonders what she should do for accounting purposes. What do you
recommend?
from her grandmother. They spent many happy hours mastering every type of cookie
imaginable and later devised new recipes that were both healthy and delicious. Now at
the start of her second year in college, Natalie is investigating possibilities for starting
her own business as part of the entrepreneurship program in which she is enrolled.
A long-time friend insists that Natalie has to 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 peo-
ple’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 group sessions
(which will probably be more entertainment than education) and individual lessons.
Natalie also decides to include children in her target market. The first difficult deci-
sion is coming up with the perfect name for her business. She settles on “Cookie
Creations,” and then moves on to more important issues.
Instructions
(a) What form of business organization—proprietorship, partnership, or corporation—
do you recommend that Natalie use for her business? Discuss the benefits and weak-
nesses of each form that Natalie might consider.
(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, revenue, and expense 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?
(e) Natalie expects she will have to use her car to drive to people’s homes and to pick up
supplies, but she also needs to use her car for personal reasons. She recalls from her
first-year accounting course something about keeping business and personal assets
separate. She wonders what she should do for accounting purposes. What do you
recommend?