HumbleBakes Ltd is a well - renowned bakery chain preparing for the festive rush. To meet its
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Question:
HumbleBakes Ltd is a wellrenowned bakery chain preparing for the festive rush. To
meet its demand for its signature cranberry bread, the company sources a special type
of wholewheat flour.
The following are transactions of HumbleBakes Ltd for November :
November: Opening inventory of kilograms of flour at R per kilogram.
November: Purchased an additional kilograms of flour from FlourMasters Ltd
at R per kilogram.
November: Sold cranberry bread units to Bakery Delights, a local retailer,
at a markup on cost
November: Bought kilograms of flour from GoldenGrains Ltd The initial
price was R per kilogram. However, after a negotiated trade discount, the
effective cost was brought down to R per kilogram.
November: Returned kilograms of the flour purchased on Nov to
FlourMasters Ltd due to inconsistency in quality. A full refund was provided.
November: An order of cranberry bread units was fulfilled for Downtown
Bakery Stores at a markup on cost
November : In anticipation of the December rush and not wanting to use aging
flour, HumbleBakes Ltd offered Harbor Cafe Chain a special deal: they sold
cranberry bread units at markup on cost with an attractive settlement
discount if paid within days. Harbor Cafe Chain was more than happy to oblige
and paid within days. The cost price per cranberry bread was R
Additional information:
kilogram of flour is required to bake one unit of cranberry bread.
HumbleBakes Ltd only trades in cash payments.
HumbleBakes Ltd uses the perpetual recording method and Firstinfirstout
cost allocation method.
Ignore VAT and taxation for this question.
Round to two decimals where applicable. Prepare the general journal entries to record all the transactions that took place
on November and November considering how the trade and settlement
discounts should be recorded.
marks
Record the above transactions of HumbleBakes Ltd including the impact of the
trade discount and settlement discount in the following general ledger accounts
for the month of November :
Inventory marks
Sales marks
Instructions:
Dates are required. Show all calculations.
Accounts must be closedoff.
marks
Related Book For
Managerial Decision Modeling With Spreadsheets
ISBN: 9780136115830
3rd Edition
Authors: Nagraj Balakrishnan, Barry Render, Jr. Ralph M. Stair
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