Bearkat Bicycles Practice Set General Instructions: You should check off each requirement to ensure all have been completed. The practice set is worth 50 points and is due at the beginning o class on Tuesday, October 5 and must be handwritten Steps for getting your Practice Set ready: 1. Using the Chart of Accounts, enter all account names and account number in the General Ledger. Enter them in the order given in the Chart of Accounts The account names listed in the Chart of Accounts are the only account nam you may use in your journal entries. 2. Using December's Balance Sheet, enter beginning account balances in the General Ledger. Beginning balances only come from the Balance Sheet. 3. Enter the beginning balance for Job 14 in the Job Cost Sheet. Beginning balance is the WIP balance as of December 31, 2020. Look on the Balance Sheet for this amount For the month of January 2021: 1. Read the Background information on next page 2. Record the journal entries in the general journal for the transactions liste below and on the following page. Round all journal entries to the nearest de amounts. a. Post all entries to their respective accounts in the general ledger. b. Record all job costs on their respective job cost sheets. Use two deca places on the job cost sheets. 3. Prepare the unadjusted trial balance for January 31, 2021 and do not abbreviate the account titles. 4. Prepare a Schedule of Cost of Goods Manufactured for the month of Jar 2021 and do not abbreviate the account titles. Background Information: In 2020, Sammy Bearkat opened a bicycle manufacturing business named Bearkat Bicycles. Sammy Bearkat, the sole stockholder, invested $50,000 for 10,000 shares of common stock in December. The company currently manufactures and sells racing bicycles for $2,500 to customers in Huntsville, Texas and its surrounding areas. His business has become so successful that Sammy can no longer build the bicycles out of his garage; thus, he has decided to expand his business. To meet demand, he has hired eight employees including a production supervisor, a salesperson, and an administrative assistant. The company has just signed a one-year lease with a local broker for downtown retail space. The company has one order (Job 14) that was started on December 15, 2020 for 3 racing bicycles that are still in process but will be completed in the next month. Bearkat Bicycles uses a manual accounting system and a chart of accounts has been provided. They've received four new orders for racing bicycles, which Bearkat will assign into four jobs as follows: o Job 15: 6 racing bicycles ordered by Morris Masterpieces, Inc. o Job 16:9 racing bicycles ordered by the Amazing Aspen Cyclists. Job 17: 10 racing bicycles ordered by Robinson Roadsters, Inc. o Job 18: 8 racing bicycles ordered by Barker's Bike Emporium. Chart of Accounts Assets 1000 Cash 1100 Accounts Receivable 1250 Direct Materials Inventory 1260 indirect Materials Inventory 1270 Work in Process Inventory 1280 Finished Goods Inventory 1300 Office Supplies 1400 Prepaid Rent 1500 Factory Tools 1510 Accumulated Depreciation Factory Tools 1700 Building 1710 Accumulated Depreciation Building 1900 Land Liabilities 2000 Accounts Payable 2100 Utilities Payable 2300 Wages Payable 2400 Dividends Payable 2700 Notes Payable Stockholders' Equity 3000 Common Stock 3500 Retained Earnings 3600 Cash Dividends Revenues 4000 Sales Revenue Expenses 5000 Cost of Goods Sold 5500 Factory Overhead 6200 Office Supplies Expense 6300 Rent Expense 6500 Utilities Expense 6600 Wages Expense 6700 Depreciation Expense 6800 Interest Expense Bearkat Bicycles Balance Sheet December 31, 2020 be Assets $ 37,003 18,550 2,950 425 1.250 Current assets: Cash Accounts receivable Direct Materials Inventory Indirect Materials Inventory Work in Process Finished Goods Office Supplies Total current assets Property, plant and equipment: Factory Tools Accumulated Depreciation Total property, plant, and equipment Total assets 73 $ 60,251 $ 10,125 (78) 10,047 $ 70,298 Liabilities $ 7,750 3,900 $ 11,650 $ 11,650 Current liabilities: Accounts payable Wages payable Total current liabilities Total liabilities Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 50,000 8,648 58,648 70,298 $ 01 01 04 January 2021 Transactions: Per the lease agreement, which requires the first three months' rent be paid in advance, Bearkat Bicycles paid $6,600 to Sunset Run Properties to lease 1,000 square feet of retail space. A 10-year note was issued to purchase an existing 3,900 square foot building on an acre of land for $105,000. The value of the land was only 550,000. The building has an estimated useful life of 20 years and a salvage value of $9,400 02 Raw materials for production totaling $37,500 were purchased on account. Direct materials amounted to $34,400 and indirect materials amounted to $3,100 The production department requisitioned materials for the jobs in the following amounts: Requisition No. Job Direct Indirect 20 $ 610 $ 22 $1,500 $ 45 $2,375 $ 20 05 Bearkat Bicycles received $15,500 owed from a customer, The Huntsville Hotshots, and deposited this amount into the company's checking account. Paid the accrued payroll from the last two weeks of December 2020. Requisitioned more materials for jobs in progress in the following amounts: Requisition No. Direct $1,850 $ 30 $2,800 S 21 25 $6,300 $ 26 26 $1,450 $ 20 21 22 14 15 16 05 10 Indirect Job 15 23 24 16 17 18 15 Invoice for $500 from Huntsville Water & Electric is received and due February 10h. The invoice includes the water and electricity used by Bearkat Bicycles. Assume 54% of the invoice reflects factory use and the other 46% reflects administrative activities. The company declares and pays a cash dividend of S. 38 per share. 20 22 The first note payment of 54,238 is made to the First Bank of Huntsville.me 30 Employees are paid monthly on the 5" of every month. Accrue the payroll for the entire month of January, which will be paid on February 5. The payroli includes the sales and administrative staff that worked a total of 60 hours and earns $12.50 per hour, the part-time factory maintenance worker that worked a total of 50 hours and earns $10.00 per hour, the production supervisor earns $675 a week (assume an even four weeks was worked). Ignore all related payroll taxes. In addition, the following hours were incurred by assembly line workers based on the production time cards for each job: 90 Job Hours Rate 14 20 $10 15 87 $10 16 $10 17 95 $10 18 40 $10 30 Apply factory overhead to all jobs (14, 15, 16, 17, & 18). Overhead is allocated based on direct labor costs. Budgeted overhead costs for the year were estimated to be $46,000. Bearkat estimates that direct labor costs will amoun to $115,000 for the year. 30 Jobs 14, 15, and 16 were completed and transferred to the warehouse. 30 Sold all bikes from Job 14 and Job 15, and 6 bikes from Job 16 on account. Ignore sales tax. 31 Job 17 was completed and transferred to the warehouse. Check Figures: Cash $33,965 Indirect Materials 3,341 Work in Process 2,010 Wages Payable 7,270 Factory Overhead 2,326 Unit cost Job 16 715.00 General Journal DATE ACCOUNT NAME P/R DEBIT CREDIT Bearkat Bicycles Unadjusted Trial Balance January 31, 2021 Debit Balances Credit Balances Bearkat Bicycles Cost of Goods Manufactured Schedule For the month ending January 31, 2021 Bearkat Bicycles Practice Set General Instructions: You should check off each requirement to ensure all have been completed. The practice set is worth 50 points and is due at the beginning o class on Tuesday, October 5 and must be handwritten Steps for getting your Practice Set ready: 1. Using the Chart of Accounts, enter all account names and account number in the General Ledger. Enter them in the order given in the Chart of Accounts The account names listed in the Chart of Accounts are the only account nam you may use in your journal entries. 2. Using December's Balance Sheet, enter beginning account balances in the General Ledger. Beginning balances only come from the Balance Sheet. 3. Enter the beginning balance for Job 14 in the Job Cost Sheet. Beginning balance is the WIP balance as of December 31, 2020. Look on the Balance Sheet for this amount For the month of January 2021: 1. Read the Background information on next page 2. Record the journal entries in the general journal for the transactions liste below and on the following page. Round all journal entries to the nearest de amounts. a. Post all entries to their respective accounts in the general ledger. b. Record all job costs on their respective job cost sheets. Use two deca places on the job cost sheets. 3. Prepare the unadjusted trial balance for January 31, 2021 and do not abbreviate the account titles. 4. Prepare a Schedule of Cost of Goods Manufactured for the month of Jar 2021 and do not abbreviate the account titles. Background Information: In 2020, Sammy Bearkat opened a bicycle manufacturing business named Bearkat Bicycles. Sammy Bearkat, the sole stockholder, invested $50,000 for 10,000 shares of common stock in December. The company currently manufactures and sells racing bicycles for $2,500 to customers in Huntsville, Texas and its surrounding areas. His business has become so successful that Sammy can no longer build the bicycles out of his garage; thus, he has decided to expand his business. To meet demand, he has hired eight employees including a production supervisor, a salesperson, and an administrative assistant. The company has just signed a one-year lease with a local broker for downtown retail space. The company has one order (Job 14) that was started on December 15, 2020 for 3 racing bicycles that are still in process but will be completed in the next month. Bearkat Bicycles uses a manual accounting system and a chart of accounts has been provided. They've received four new orders for racing bicycles, which Bearkat will assign into four jobs as follows: o Job 15: 6 racing bicycles ordered by Morris Masterpieces, Inc. o Job 16:9 racing bicycles ordered by the Amazing Aspen Cyclists. Job 17: 10 racing bicycles ordered by Robinson Roadsters, Inc. o Job 18: 8 racing bicycles ordered by Barker's Bike Emporium. Chart of Accounts Assets 1000 Cash 1100 Accounts Receivable 1250 Direct Materials Inventory 1260 indirect Materials Inventory 1270 Work in Process Inventory 1280 Finished Goods Inventory 1300 Office Supplies 1400 Prepaid Rent 1500 Factory Tools 1510 Accumulated Depreciation Factory Tools 1700 Building 1710 Accumulated Depreciation Building 1900 Land Liabilities 2000 Accounts Payable 2100 Utilities Payable 2300 Wages Payable 2400 Dividends Payable 2700 Notes Payable Stockholders' Equity 3000 Common Stock 3500 Retained Earnings 3600 Cash Dividends Revenues 4000 Sales Revenue Expenses 5000 Cost of Goods Sold 5500 Factory Overhead 6200 Office Supplies Expense 6300 Rent Expense 6500 Utilities Expense 6600 Wages Expense 6700 Depreciation Expense 6800 Interest Expense Bearkat Bicycles Balance Sheet December 31, 2020 be Assets $ 37,003 18,550 2,950 425 1.250 Current assets: Cash Accounts receivable Direct Materials Inventory Indirect Materials Inventory Work in Process Finished Goods Office Supplies Total current assets Property, plant and equipment: Factory Tools Accumulated Depreciation Total property, plant, and equipment Total assets 73 $ 60,251 $ 10,125 (78) 10,047 $ 70,298 Liabilities $ 7,750 3,900 $ 11,650 $ 11,650 Current liabilities: Accounts payable Wages payable Total current liabilities Total liabilities Stockholders' Equity Common stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity $ 50,000 8,648 58,648 70,298 $ 01 01 04 January 2021 Transactions: Per the lease agreement, which requires the first three months' rent be paid in advance, Bearkat Bicycles paid $6,600 to Sunset Run Properties to lease 1,000 square feet of retail space. A 10-year note was issued to purchase an existing 3,900 square foot building on an acre of land for $105,000. The value of the land was only 550,000. The building has an estimated useful life of 20 years and a salvage value of $9,400 02 Raw materials for production totaling $37,500 were purchased on account. Direct materials amounted to $34,400 and indirect materials amounted to $3,100 The production department requisitioned materials for the jobs in the following amounts: Requisition No. Job Direct Indirect 20 $ 610 $ 22 $1,500 $ 45 $2,375 $ 20 05 Bearkat Bicycles received $15,500 owed from a customer, The Huntsville Hotshots, and deposited this amount into the company's checking account. Paid the accrued payroll from the last two weeks of December 2020. Requisitioned more materials for jobs in progress in the following amounts: Requisition No. Direct $1,850 $ 30 $2,800 S 21 25 $6,300 $ 26 26 $1,450 $ 20 21 22 14 15 16 05 10 Indirect Job 15 23 24 16 17 18 15 Invoice for $500 from Huntsville Water & Electric is received and due February 10h. The invoice includes the water and electricity used by Bearkat Bicycles. Assume 54% of the invoice reflects factory use and the other 46% reflects administrative activities. The company declares and pays a cash dividend of S. 38 per share. 20 22 The first note payment of 54,238 is made to the First Bank of Huntsville.me 30 Employees are paid monthly on the 5" of every month. Accrue the payroll for the entire month of January, which will be paid on February 5. The payroli includes the sales and administrative staff that worked a total of 60 hours and earns $12.50 per hour, the part-time factory maintenance worker that worked a total of 50 hours and earns $10.00 per hour, the production supervisor earns $675 a week (assume an even four weeks was worked). Ignore all related payroll taxes. In addition, the following hours were incurred by assembly line workers based on the production time cards for each job: 90 Job Hours Rate 14 20 $10 15 87 $10 16 $10 17 95 $10 18 40 $10 30 Apply factory overhead to all jobs (14, 15, 16, 17, & 18). Overhead is allocated based on direct labor costs. Budgeted overhead costs for the year were estimated to be $46,000. Bearkat estimates that direct labor costs will amoun to $115,000 for the year. 30 Jobs 14, 15, and 16 were completed and transferred to the warehouse. 30 Sold all bikes from Job 14 and Job 15, and 6 bikes from Job 16 on account. Ignore sales tax. 31 Job 17 was completed and transferred to the warehouse. Check Figures: Cash $33,965 Indirect Materials 3,341 Work in Process 2,010 Wages Payable 7,270 Factory Overhead 2,326 Unit cost Job 16 715.00 General Journal DATE ACCOUNT NAME P/R DEBIT CREDIT Bearkat Bicycles Unadjusted Trial Balance January 31, 2021 Debit Balances Credit Balances Bearkat Bicycles Cost of Goods Manufactured Schedule For the month ending January 31, 2021