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 $6,000 Work in Process-Spinning Department 1,300 Work in Process-Tufting Department 2,100 Materials 4,800 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, $81,300 2 Materials requisitioned for use: Fiber—Spinning Department, $42,000 Carpet backing—Tufting Department, $34,000 Indirect materials—Spinning Department, $3,300 Indirect materials—Tufting Department, $2,500 31 Labor used: Direct labor—Spinning Department, $26,800 Direct labor—Tufting Department, $18,700 Indirect labor—Spinning Department, $11,500 Indirect labor—Tufting Department, $11,700 31 Depreciation charged on fixed assets: Spinning Department, $5,300 Tufting Department, $3,300 31 Expired prepaid factory insurance: Spinning Department, $1,200 Tufting Department, $1,100 31 Applied factory overhead: Spinning Department, $21,700 Tufting Department, $18,400 31 Production costs transferred from Spinning Department to Tufting Department, $86,500 31 Production costs transferred from Tufting Department to Finished Goods, $153,600 31 Cost of goods sold during the period, $155,200 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.

Answer 1

Item	Account				Debit	Credit
a.	Materials				81,300
	Accounts payable					81,300
b.	work in process-spinning Deptt				42,000
	work in process-tufting Deptt				34,000
	Factory overhead -spinning Deptt				3,300
	Factory overhead -tufting Deptt				2,500
	Materials					81,800
c.	work in process-spinning Deptt				26,800
	work in process-tufting Deptt				18,700
	Factory overhead -spinning Deptt				11,500
	Factory overhead -tufting Deptt				11,700
	Wages payable					68,700
d.	Factory overhead -spinning Deptt				5,300
	Factory overhead -tufting Deptt				3,300
	Accumulated Depreciation					8,600
e	Factory overhead -spinning Deptt				1,200
	Factory overhead -tufting Deptt				1,100
	prepaid insurance					2,300
f.	work in process-spinning Deptt				21,700
	work in process-tufting Deptt				18,400
	Factory overhead -spinning Deptt					21,700
	Factory overhead -tufting Deptt					18,400
g.	work in process-tufting department				86,500
	work in process-spinning department					86,500
h.	finished goods				153,600
	work in process-tufting department					153,600
i.	cost of goods sold				155,200
	finished goods					155,200
2)	materials				4,300
	work in process -spinning Department				5,300
	work in process-tufting Department				6,100
	finished goods				4,400
	t-Accounts
	materials
	opening	4,800	Requistioned		81,800
	purchases	81,300
	end bal	4,300
	work in process-spinning deptt
	opening	1,300
	DM	42,000	trfg -packing deptt		86,500
	DL	26,800
	OH applied	21,700
	end bal	5,300
	work in process-tuftingg deptt
	opening	2,100
	trfd making	86,500
	DM	34,000	finished goods		153,600
	DL	18,700
	OH applied	18,400
	end bal	6,100
	finished goods
	opening	6,000	cost of goods sold		155,200
	WIP-packing	153,600
	end bal	4,400
3)	Factory overhea-spinning department				400	Credit
	Factory overhead -tuffting department				200	Debit
	Factory overhead-spinning department
	indirect mt	3,300	WIP		21,700
	ind lab	11,500
	dep	5,300
	prepaid	1,200
			end bal		400
	Factory overhead-tufting department
	indirect mt	2,500	WIP		18,400
	ind lab	11,700
	dep	3,300
	prepaid	1,100
	end bal	200