Heaven 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. 

Heavenly Creations, Inc. opened for business on January 1, 201X as planned and Heaven placed an initial deposit of $10,000 of cash into the business. First, Heaven made a purchase to stock her inventory. Heaven purchased $2,279 of direct ingredients and $150 of indirect ingredients on account for the cakes. During the month of January, the business used 200 pounds of flour, 200 pounds of sugar, 67 dozen eggs and had 4 bad eggs to dispose of during the month. 20 baking soda boxes, 200 pounds of butter, 100 pounds of raisins, 50 bottles of rum, and the other ingredients (one box of each for a total of four).

Manufacturing overhead is applied to production at 4 dollars per cake. Heaven paid cash for the purchase of the oven and all the 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 in full at month-end. Heaven’s Raw Material physical periodic inventory count resulted in an Inventory level valued at zero at month-end.

Required: Use Table 3 to record and post the Heavenly Creations, Inc. January transactions using the General Journal and the provided T-accounts (round all calculations to 2 decimal places) All other costs such as utilities, must be accounted for in the T-accounts provided (assume such transactions where applicable, are paid in cash).

Table 4 shows the Chart of Accounts for Heavenly Creations, Inc.

  
 
 

Transcribed Image Text:

Item and Ingredients Conventional oven Refrigerator Baking pans, licenses Baking flour Eggs Sugar Baking soda Butter Raisins Others (currants, diced date, nutmeg, molasses) Cash Register Rum (alcohol) Utilities (includes gas, electric and water) Mobile phone (business) Salary-Heaven Salary - nieces Salary-aunt Accountant Rent Estimated MOH TABLE 1: COST INFORMATION Cost $6,000 (depreciated over 5 years on a Straight-Line basis No salvage value) $0 (provided by the landlord) $0 (paid for by dad) $24 per 8 pounds bag $2 per dozen $15 per 25 pounds bag $6 per 14 pounds box $6.50 per 4 pounds $8 per 2 pounds $30 for all 4 boxes per month $12 per month (rental for 2 years) $12 per bottle $50 per month $50 per month $500 per month $8 per hour $100 per month $100 per month $600 per month $4.00 per cake Standard per Cake n/a n/a 1 pound 4 eggs 1 pound 1 pound ½ pound 1/4 quarter of bottle 1 person 1.5 hours per cake Cake Item and Ingredients Conventional oven Refrigerator Baking pans, licenses Baking flour Eggs Sugar Baking soda Butter Raisins Others (currants, diced date, nutmeg, molasses) Cash Register Rum (alcohol) Utilities (includes gas, electric and water) Mobile phone (business) Salary-Heaven Salary - nieces Salary-aunt Accountant Rent Estimated MOH TABLE 1: COST INFORMATION Cost $6,000 (depreciated over 5 years on a Straight-Line basis No salvage value) $0 (provided by the landlord) $0 (paid for by dad) $24 per 8 pounds bag $2 per dozen $15 per 25 pounds bag $6 per 14 pounds box $6.50 per 4 pounds $8 per 2 pounds $30 for all 4 boxes per month $12 per month (rental for 2 years) $12 per bottle $50 per month $50 per month $500 per month $8 per hour $100 per month $100 per month $600 per month $4.00 per cake Standard per Cake n/a n/a 1 pound 4 eggs 1 pound 1 pound ½ pound 1/4 quarter of bottle 1 person 1.5 hours per cake Cake

Answer rating: 100% (QA)

To record and post the transactions for Heavenly Creations Inc in January well use the information p... View the full answer