Question

Port Ormond Carpet Company manufactures carpets. Fiber is placed in process in the Spinning Department, where it is spun into yarn. The output of the Spinning Department is transferred to the Tufting Department, where carpet backing is added at the beginning of the process and the process is completed. On January 1, Port Ormond Carpet Company had the following inventories:

Finished Goods	$6,500
Work in Process-Spinning Department	1,200
Work in Process-Tufting Department	2,300
Materials	4,100

Departmental accounts are maintained for factory overhead, and both have zero balances on January 1. Manufacturing operations for January are summarized as follows:

Jan.	1	Materials purchased on account, $84,700
	2	Materials requisitioned for use:
		Fiber—Spinning Department, $42,800
		Carpet backing—Tufting Department, $34,000
		Indirect materials—Spinning Department, $3,400
		Indirect materials—Tufting Department, $2,700
	31	Labor used:
		Direct labor—Spinning Department, $26,600
		Direct labor—Tufting Department, $17,600
		Indirect labor—Spinning Department, $11,900
		Indirect labor—Tufting Department, $11,800
	31	Depreciation charged on fixed assets:
		Spinning Department, $5,400
		Tufting Department, $4,000
	31	Expired prepaid factory insurance:
		Spinning Department, $1,100
		Tufting Department, $800
	31	Applied factory overhead:
		Spinning Department, $22,200
		Tufting Department, $18,950
	31	Production costs transferred from Spinning Department to Tufting Department, $89,500
	31	Production costs transferred from Tufting Department to Finished Goods, $151,400
	31	Cost of goods sold during the period, $154,200

	Required:
1.	Journalize the entries to record the operations, using the dates provided with the summary of manufacturing operations. Refer to the Chart of Accounts for exact wording of account titles.
2.	Compute the January 31 balances of the inventory accounts.
3.	Compute the January 31 balances of the factory overhead accounts.

Journal

1. Journalize the entries to record the operations, using the dates provided with the summary of manufacturing operations. Refer to the Chart of Accounts for exact wording of account titles.

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JOURNAL

ACCOUNTING EQUATION

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Final Questions

2. Compute the January 31 balances of the inventory accounts.

Materials
Work in Process:
• Spinning Department
• Tufting Department
Finished Goods

3. Compute the January 31 balances of the factory overhead accounts. Enter all amounts as positive numbers.

Factory Overhead:
• Spinning Department
• Tufting Department

Answer 1

Item	Account				Debit	Credit
a.	Materials				84,700
	Accounts payable					84,700
b.	work in process-spinning Deptt				42,800
	work in process-tufting Deptt				34,000
	Factory overhead -spinning Deptt				3,400
	Factory overhead -tufting Deptt				2,700
	Materials					82,900
c.	work in process-spinning Deptt				26,600
	work in process-tufting Deptt				17,600
	Factory overhead -spinning Deptt				11,900
	Factory overhead -tufting Deptt				11,800
	Wages payable					67,900
d.	Factory overhead -spinning Deptt				5,400
	Factory overhead -tufting Deptt				4,000
	Accumulated Depreciation					9,400
e	Factory overhead -spinning Deptt				1,100
	Factory overhead -tufting Deptt				800
	prepaid insurance					1,900
f.	work in process-spinning Deptt				22,200
	work in process-tufting Deptt				18,950
	Factory overhead -spinning Deptt					22,200
	Factory overhead -tufting Deptt					18,950
g.	work in process-tufting department				89,500
	work in process-spinning department					89,500
h.	finished goods				151,400
	work in process-tufting department					151,400
i.	cost of goods sold				154,200
	finished goods					154,200
2)	materials				5,900
	work in process -spinning Department				3,300
	work in process-tufting Department				10,950
	finished goods				3,700
	t-Accounts
	materials
	opening	4,100	Requistioned		82,900
	purchases	84,700
	end bal	5,900
	work in process-spinning deptt
	opening	1,200
	DM	42,800	trfg -packing deptt		89,500
	DL	26,600
	OH applied	22,200
	end bal	3,300
	work in process-tuftingg deptt
	opening	2,300
	trfd making	89,500
	DM	34,000	finished goods		151,400
	DL	17,600
	OH applied	18,950
	end bal	10,950
	finished goods
	opening	6,500	cost of goods sold		154,200
	WIP-packing	151,400
	end bal	3,700
3)	Factory overhea-spinning department				400	Credit
	Factory overhead -tuffting department				350	Debit
	Factory overhead-spinning department
	indirect mt	3,400	WIP		22,200
	ind lab	11,900
	dep	5,400
	prepaid	1,100
			end bal		400
	Factory overhead-tufting department
	indirect mt	2,700	WIP		18,950
	ind lab	11,800
	dep	4,000
	prepaid	800
	end bal	350