Table Cost Information

Items & Ingredients	Cost	Standard Per Cake
Conventional Oven	$6,000 (depreciate over 5 years on a straightline basis with no residual/salvage value)	N/A
Refrigerator	Provided by landlord	N/A
Baking pan, licenses	Provided by Dad	N/A
Baking Flour	$24 per 8 pound bag	1 pound
Eggs	$2 per dozen	4 eggs
Sugar	$15 per 25 pound bag	1 pound
Baking Soda	$6 per 14 pound box	see question
Butter	$6.50 per 4 pounds	1 pound
Raisons	$8 per 2 pounds	1/2 pound
Others (current, diced date, nutmeg, molasses)	$30 for all 4 boxes per month
Rum	$12 per bottle	1/4 per bottle
Utilities (includes gas, electric and water)	$50 per month
Moblie phone (business)	$50 per month
Salary-Keisha	$500 per month
Salary-nieces	$9 per hour	1 person 1.5 hrs per cake
Salary-aunt	$100 per month
Accountant	$100 per month
Estimated MOH	$5 per cake

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, 75 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 rum, 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 $5 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) and t-accounts. All other costs such as utilities, must be accounted for in the journal entries (assume such transactions where applicable, are paid in cash).