Business Transactions (Assignment #3)

Keisha spent the month of December talking to various suppliers in order to determine her cost structure. She added cost data to the information in Table

1. K&J Bakery Inc. opened for business on January 1, 20X1 as planned. During the month of January, the business purchased and used 200 pounds of flour, 200 pounds of sugar, 67 dozen eggs and had 5 bad eggs to dispose of during the month, 20 baking soda boxes, 200 pounds of butter, 100 pounds of raisons, 50 bottles of run, and the other ingredients (one box of each for a total of four) all from one supplier on account. Manufacturing overhead is applied to production at $4 per cake. Keisha purchased the oven using the startup capital and paid all salaries. Her nieces worked 300 hours in total for the month. January was a very good month for the bakery since it baked 200 cakes and sold all for cash. The average selling price was $50 per cake. All manufacturing overhead is closed out at month end. The supplier was paid at month end.

Required: Document K&J Bakery Inc January transactions using journal entries (round all calculations to 2 decimal places). All other costs such as utilities, must be accounted for in the journal entries (assume such transactions where applicable, are paid in cash).

TABLE 1: COST INFORMATION Standard per Cake n/a Cost $6,000 (depreciated over 5 years on a SL basis No salvage value SO $0 (paid for b S24 per 8 pounds ba S2 per dozen Item and Ingredients Conventional overn Refri Bakin Baking flour the landlord licenses n/a 4 e S15 per 25 Baking soda S6 per 14 $6.50 per 4 Butter Raisins Others (currants, diced date, $30 for all 4 boxes per month $12 per month (rental for 2 molasses Cash Register $12 per bottle gtr of bottle Rum (alcohol Utilities (includes gas, electric S50 per month and water Mobile p Salary- Keisha Salary nieces S50 per month S500 per month business 1 person 1.5 hours per cake $8 per hour $100 per month $100 per month $4.00 per cake aunt Accountant Estimated MOH TABLE 1: COST INFORMATION Standard per Cake n/a Cost $6,000 (depreciated over 5 years on a SL basis No salvage value SO $0 (paid for b S24 per 8 pounds ba S2 per dozen Item and Ingredients Conventional overn Refri Bakin Baking flour the landlord licenses n/a 4 e S15 per 25 Baking soda S6 per 14 $6.50 per 4 Butter Raisins Others (currants, diced date, $30 for all 4 boxes per month $12 per month (rental for 2 molasses Cash Register $12 per bottle gtr of bottle Rum (alcohol Utilities (includes gas, electric S50 per month and water Mobile p Salary- Keisha Salary nieces S50 per month S500 per month business 1 person 1.5 hours per cake $8 per hour $100 per month $100 per month $4.00 per cake aunt Accountant Estimated MOH