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	$7,200
Work in Process-Spinning Department	1,000
Work in Process-Tufting Department	2,400
Materials	4,300

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, $80,000
	2	Materials requisitioned for use:
		Fiber—Spinning Department, $42,000
		Carpet backing—Tufting Department, $34,600
		Indirect materials—Spinning Department, $3,000
		Indirect materials—Tufting Department, $2,900
	31	Labor used:
		Direct labor—Spinning Department, $26,900
		Direct labor—Tufting Department, $17,800
		Indirect labor—Spinning Department, $11,700
		Indirect labor—Tufting Department, $11,800
	31	Depreciation charged on fixed assets:
		Spinning Department, $5,300
		Tufting Department, $3,500
	31	Expired prepaid factory insurance:
		Spinning Department, $1,300
		Tufting Department, $1,000
	31	Applied factory overhead:
		Spinning Department, $21,500
		Tufting Department, $18,850
	31	Production costs transferred from Spinning Department to Tufting Department, $85,000
	31	Production costs transferred from Tufting Department to Finished Goods, $152,600
	31	Cost of goods sold during the period, $155,300

	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
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				80,000
	Accounts payable					80,000
b.	work in process-spinning Deptt				42,000
	work in process-tufting Deptt				34,600
	Factory overhead -spinning Deptt				3,000
	Factory overhead -tufting Deptt				2,900
	Materials					82,500
c.	work in process-spinning Deptt				26,900
	work in process-tufting Deptt				17,800
	Factory overhead -spinning Deptt				11,700
	Factory overhead -tufting Deptt				11,800
	Wages payable					68,200
d.	Factory overhead -spinning Deptt				5,300
	Factory overhead -tufting Deptt				3,500
	Accumulated Depreciation					8,800
e	Factory overhead -spinning Deptt				1,300
	Factory overhead -tufting Deptt				1,000
	prepaid insurance					2,300
f.	work in process-spinning Deptt				21,500
	work in process-tufting Deptt				18,850
	Factory overhead -spinning Deptt					21,500
	Factory overhead -tufting Deptt					18,850
g.	work in process-tufting department				85,000
	work in process-spinning department					85,000
h.	finished goods				152,600
	work in process-tufting department					152,600
i.	cost of goods sold				155,300
	finished goods					155,300
2)	materials				1,800
	work in process -spinning Department				6,400
	work in process-tufting Department				6,050
	finished goods				4,500
	t-Accounts
	materials
	opening	4,300	Requistioned		82,500
	purchases	80,000
	end bal	1,800
	work in process-spinning deptt
	opening	1,000
	DM	42,000	trfg -packing deptt		85,000
	DL	26,900
	OH applied	21,500
	end bal	6,400
	work in process-tuftingg deptt
	opening	2,400
	trfd making	85,000
	DM	34,600	finished goods		152,600
	DL	17,800
	OH applied	18,850
	end bal	6,050
	finished goods
	opening	7,200	cost of goods sold		155,300
	WIP-packing	152,600
	end bal	4,500
3)	Factory overhea-spinning department				200	Credit
	Factory overhead -tuffting department				350	Debit
	Factory overhead-spinning department
	indirect mt	3,000	WIP		21,500
	ind lab	11,700
	dep	5,300
	prepaid	1,300
			end bal		200
	Factory overhead-tufting department
	indirect mt	2,900	WIP		18,850
	ind lab	11,800
	dep	3,500
	prepaid	1,000
	end bal	350