To create the coffee cup logo, first let us create the cup in illustrator and then use Photoshop to create the logo. Final image :

Creating the cup in Illustrator :

STEP 1 : Use the Pen Tool, click on the area and then click at the bottom in a vertical distance ( to form the left side of the cup ) but this time do not take your finger away from the mouse but hold on and drag a little so that a small curve is formed. Next, click at an horizontal distance and again drag a little to get a curve ( this forms the bottom part of the cup ). Now simply click on the top at the same distance as the first line ( to form the right side of the cup) and click back to the original point where you started to get a closed figure and also forming the top part of the cup. Note: The top part of the cup will be covered by an elliptical shape later and will not be visible. After drawing you can use the Direct Selection Tool to click on a particular point and drag them to change the curves etc.to alternate the shape of the cup. Set the fill color of this coffee cup to #  CBFF00 ( Green shade ). Do not set any stroke color and therefore no stroke size.

STEP 2 : Once the adjustments are made, draw an oval shape using the Ellipse shape tool. Fill the ellipse shape with # CBFF00 ( Green shade ) the same color as the cup and do not set any stroke color that is there is no stroke. Position this ellipse in such a way that it covers the top part of the cup. Use the transform tool to reduce or increase the size of the shape. Now, select the oval shape and copy it using CTRL + C or go to Edit menu > Copy and then use the option > Edit menu > Paste in Front or CTRL + F to paste the duplicate copy of the oval shape in front of it. The duplicate copy is automatically selected so set the  Fill color for the  ellipse shape with # 5A3D1C ( Brown shade )and do not set any stroke color that is there is no stroke. Use the Transform tool and reduce the size so that it looks smaller than the green ellipse shape. Position this ellipse in such a way that it looks like coffee in a cup and therefore position it to show the green oval shape to show as the inside of a cup.

STEP 3 : Next to form the design for the cup, the result looks easier but the procedure is quiet complicated to blend the design with the cup. Use the Rectangle shape tool and draw a rectangle with length longer than the breadth. After drawing you can use the Direct Selection Tool to click on a particular point and drag them  towards the right or left accordingly to change the curves to blend the design to the cup.Set the fill color of this coffee cup to # 1BCEEC ( Blue shade ). Do not set any stroke color and therefore no stroke size. Now, select the rectangular pattern, and use EFFECT MENU > WARP > ARC and set the Bend level to - (Minus) 25 % in the horizontal position. Now select the rectangle shape and use ALT + click the shape using selection tool  and drag to make a copy. Make two copies. Or simply use Copy and Paste options to make two copies and position them on the cup. Use the Direct Selection Tool to click the corner points and drag them  towards the right or left accordingly to fit the rectanglular shapes to the cups.

STEP 4 : Now to create the smoke for the coffee, use the Ellipse shape tool and draw a thin long oval shape. Select the shape and place it over the cup in the center. The fill color for this is = # 3F3F3F ( Grey shade ) and do not set any stroke color that is there is no stroke. Selecting this shape, go to EFFECT MENU > DISTORT AND TRANSFORM > TWIST and set the twist angle to 30 degree. Use ALT + click the shape using selection tool  and drag to make a copy. Make two copies. Or simply use Copy and Paste options to make two copies and position the copies on the either side of the middle smoke figure. Use the Transform tool and select both the copies and reduce their sizes and change their colors to = # FF7F00 ( Orange shade). You can see the final result above in the first section of the image.

STEP 5 : Now to create the handle, follow the procedure. Draw an oval shape using the Ellipse shape tool. Fill the oval shape with WHITE color and set the stroke color as = # 3398FF ( Blue shade ) and the Stroke size as = 5 pt. Use the Transform tool and rotate it to form the angle of the handle. Now, select the oval shape and copy it using CTRL + C or go to Edit menu > Copy and then use the option > Edit menu > Paste in Back or CTRL + B to paste the duplicate copy of the oval shape behind the original. Once pasted, you will not be able to see the shape but the duplicate copy is automatically selected. Leaving the fill color as it is, set the Stroke color as = # 7DFF00 ( Green shade ). See that there is no white space between the green stroked ellipse shape and the blue stroked ellipse shape.

Using the cup created in Illustrator to create a custom Coffee cup logo in Photoshop :

STEP 6 : Next step is to select the the whole content of the cup including the cup, the design , the smoke and the oval shapes and open Adobe Photoshop, and open a new document and DRAG IN the selected content  (the content selected in Illustrator). The whole cup is placed as a 'Smart object' in Photoshop as a single item. To edit them you can use Edit smart object option to directly edit in Illustrator. Once you have placed the cup shape, follow the procedure below to begin with the logo. Set the Blend mode of the layer containing the Cup shape = MULTIPLY. This is very important as this what blend the cup image to the background.

STEP 7 : Create a new layer and name it = BACKGROUND. Fill this layer using ALT + Backspace with color = # 553f3e (Purple shade ). Set the color in the color box before filling the layer. Now, for this layer > Background, apply filter effect. Go to FILTER > FILTER GALLERY > TEXTURE > CRAQUELURE. Set the Crack spacing to 15, Crack Depth to 6, and Crack Brightness to 9. Leave the Blending mode for this layer as = Normal but reduce the opacity to 80 % from 100 %.

STEP 8 : Create a new layer and name it = BACKGROUND 2. Fill this layer using ALT + Backspace with color = # 553f3e (Purple shade ). Set the color in the color box before filling the layer. Now, for this layer > Background, apply filter effect. Go to FILTER > FILTER GALLERY > TEXTURE > TEXTURIZER  and set the Texture type to Blurlap with Scaling = 150 % and Relief = 3 and Light = Top Left. Set the blend mode of this layer in layers box as = MULTIPLY and also reduce the opacity to 90 %. See that the Background 2 layer is placed over the Background 1 layer.

STEP 9 : Move the layer containing the cup and place it above the Background 2 layer. Now select the Cup layer. Now follow the procedure to type a text on a path created using pen tool so that we will have a slanting text.

• Drawing using Pen tool > Create a new layer. The layer has nothing to do with pen tool path because pen tool path does not appear as a layer but for temporary purpose, since we can not draw on any other layer, let us create one. Click on an area and then click near the point but this time do not remove your finger from the mouse but instead drag towards any direction to form a curve. Repeat the process for few times till you get a desired shaped curve. Note : Now in the layer box, near the Layer option on top, you should see an option called paths. Since the paths are not formed in separate layer, this is where they are available. You can come here to delete or rename or add color to paths.

• Typing the text on the path drawn > After drawing a path, Click the ‘Type tool’ and move the cursor near the path. Once moved near, the cursor changes its shape. It means you can start typing. Type the text = ' Coffee Beans ' with Font = FRENCH SCRIPT MT with REGULAR style and the text size is = 120 pt with smooth option selected. The Text color is = # d58282 ( Pink shade ). The Text when typed, automatically takes the shape of the path. The path you have drawn is still visible but when you select any other layer, the paths is hidden. When you select the Text layer, the paths becomes visible again. You can delete the path in the Paths option in layer box( by selecting the path and  right click and select the option- delete path). BUT, DO NOT DELETE the path. Deleting the path would result in deleting the Text also.

STEP 10 : The final step is to add the border for the image. Applying Border in Illustrator >  Use the Rectangle shape tool and draw a rectangle with NO fill color and stroke color set as Black and STROKE SIZE = 2 Pt, to the size of the Photoshop document containg the coffee cup logo. Selecting the path creating with the pen tool, go to > Brush ( Along with fill color and stroke color, you will also have an option called Brush). Right click the Brush option and select Open Brush Library. Under this option, amongst the various brush styles, select >  Borders_Novelty and choose the border called > Coffee Cups.

Once the Border is applied, you can reduce the size of the paths by clicking and Dragging the anchor points to fit correctly as the border. Now in the Brushes section, select the Coffee cups brush style that you applied, and double click it. A dialog box opens where you can adjust the spacing of the cups design.  Under size, set the Scale = 75 % and Spacing = 50 %. Once the border is complete, select the border and drag it into the Photoshop document we were working in. Even this border will be placed as a Smart object. Transform it to fit the image. Set the Blend mode of this layer in layers box to = LUMINOSITY. With this, our Coffee Cup logo is complete. The layers are arranges as follows :