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	$6,200
Work in Process-Spinning Department	1,100
Work in Process-Tufting Department	2,700
Materials	4,200

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

28 entries

Jan.	1	Materials purchased on account, $81,200
	2	Materials requisitioned for use:
		Fiber—Spinning Department, $43,000
		Carpet backing—Tufting Department, $34,200
		Indirect materials—Spinning Department, $3,500
		Indirect materials—Tufting Department, $2,800
	31	Labor used:
		Direct labor—Spinning Department, $27,600
		Direct labor—Tufting Department, $17,900
		Indirect labor—Spinning Department, $11,800
		Indirect labor—Tufting Department, $11,700
	31	Depreciation charged on fixed assets:
		Spinning Department, $5,300
		Tufting Department, $3,700
	31	Expired prepaid factory insurance:
		Spinning Department, $1,300
		Tufting Department, $1,100
	31	Applied factory overhead:
		Spinning Department, $22,200
		Tufting Department, $18,950
	31	Production costs transferred from Spinning Department to Tufting Department, $86,000
	31	Production costs transferred from Tufting Department to Finished Goods, $150,400
	31	Cost of goods sold during the period, $153,400

	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.

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

Materials		selector 1 Debit Credit
Work in Process:
• Spinning Department		selector 2 Debit Credit
• Tufting Department		selector 3 Debit Credit
Finished Goods		selector 4 Debit Credit

Points:

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Explanation

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

Factory Overhead:
• Spinning Department		selector 1 Debit Credit
• Tufting Department		selector 2 Debit Credit

Answer 1

Item	Account				Debit	Credit
a.	Materials				81,200
	Accounts payable				81,200
b.	work in process-spinning Deptt		43,000
	work in process-tufting Deptt		34,200
	Factory overhead -spinning Deptt	3,500
	Factory overhead -tufting Deptt		2,800
	Materials					83,500
c.	work in process-spinning Deptt		27,600
	work in process-tufting Deptt		17,900
	Factory overhead -spinning Deptt	11,800
	Factory overhead -tufting Deptt		11,700
	Wages payable				69,000
d.	Factory overhead -spinning Deptt	5,300
	Factory overhead -tufting Deptt		3,700
	Accumulated Depreciation			9,000
e	Factory overhead -spinning Deptt	1,300
	Factory overhead -tufting Deptt		1,100
	prepaid insurance				2,400
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	86,000
	work in process-spinning department		86,000
h.	finished goods			150,400
	work in process-tufting department		150,400
i.	cost of goods sold			153,400
	finished goods				153,400
2)	materials				1,900
	work in process -spinning Department	7,900
	work in process-tufting Department	9,350
	finished goods			3,200
	t-Accounts
	materials
	opening	4,200	Requistioned	83,500
	purchases	81,200
	end bal	1,900
	work in process-spinning deptt
	opening	1,100
	DM	43,000	trfg -packing deptt	86,000
	DL	27,600
	OH applied	22,200
	end bal	7,900
	work in process-tuftingg deptt
	opening	2,700
	trfd making	86,000
	DM	34,200	finished goods	150,400
	DL	17,900
	OH applied	18,950
	end bal	9,350
	finished goods
	opening	6,200	cost of goods sold	153,400
	WIP-packing	150,400
	end bal	3,200
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