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 A. 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.*** This Journal should have 28 rows in total*** CHART OF ACCOUNTS Port Ormond Carpet Company General Ledger ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable 131 Materials 141 Work in Process-Spinning Department 142 Work in Process-Tufting Department 151 Factory Overhead-Spinning Department 152 Factory Overhead-Tufting Department 161 Finished Goods 171 Supplies 172 Prepaid Insurance 173 Prepaid Expenses 181 Land 191 Factory 192 Accumulated Depreciation-Factory LIABILITIES 210 Accounts Payable 221 Utilities Payable 231 Notes Payable 236 Interest Payable 251 Wages Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends 390 Income Summary B. . Compute the January 31 balances of the inventory accounts. Enter your amounts in positive value. Materials _________ Work in Process:________ • Spinning Department_________ • Tufting Department________ Finished Goods________ C. . Compute the January 31 balances of the factory overhead accounts. Enter your amounts in positive value. Factory Overhead:__________ • Spinning Department__________ • Tufting Department__________ REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Wages Expense 531 Selling Expenses 532 Insurance Expense 533 Utilities Expense 534 Supplies Expense 540 Administrative Expenses 561 Depreciation Expense-Factory 590 Miscellaneous Expense 710 Interest Expense

Answer 1

Journal Entries:
S.no.	Accounts title and explanations					Debit $	Credit $
1-Jan	Raw material inventory Dr.					84700
	Accounts payable						84700
2-Jan	Work in process-Spinning Dr.					42800
	Work in process-Tufting					34000
	Factory Overheads-Spinning Dr.					3400
	Factory Overheads -Tufting Dr.					2700
	Raw material Inventory						82900
31-Jan	Work in process-Spinning Dr.					26600
	Work in process-Tufting					17600
	Factory Overheads-Spinning Dr.					11900
	Factory Overheads -Tufting Dr.					11800
	factory wages						67900
31-Jan	Factory Overheads-Spinning Dr.					5400
	Factory Overheads -Tufting Dr.					4000
	Accumulated depreciation_Factory						9400
31-Jan	Factory Overheads-Spinning Dr.					1100
	Factory Overheads -Tufting Dr.					800
	Prepaid Insurance						1900
31-Jan	Work in process-Spinning Dr.					22200
	Factory Overheads-Spinning						22200
	Work in Process-Tufting Dr.					18950
	Factory Overheads-Tufting						18950
31-Jan	Work in process-Tufting Dr.					89500
	Work in process-Spinning						89500
31-Jan	Finished Goods inventory Dr.					151400
	Work in process-Tufting						151400
31-Jan	Cost of goods sold Dr.					154200
	Finished Goods inventory						154200
Inventory Balance:
Raw material
Beginning balannce of RM				4100
Add: Purchases				84700
Total goods available				88800
Less: Used as Direct and indirect material				82900
Ending Inventory of RM				5900
WIP-Spinnning
Beginning Inventory of WIP-Spinning				1200
Add: Current cost
Raw material				42800
Labour				26600
OH applied				22200
Total cost of goods manufacturing				92800
LesS: Cost of goods transferred				89500
Ending inventory of WIP-Spinning				3300
WIP-Tufting
Beginning Inventory of WIP-Tufting				2300
Add: Current cost
Raw material				34000
Labour				17600
OH applied				18950
Cost of goods transferred from Spining				89500
Total cost of goods manufacturing				162350
LesS: Cost of goods transferred				151400
Ending inventory of WIP-Tufting				10950
Finished Goods:
Beginning inventory				6500
Add: Cost of goods manufactured				151400
Totalc ost of goods available				157900
Less: Cost of goods sold				154200
Ending inventory of Finished Goods				3700
Req 3.
Balances of Factory OH
			Spinning	Tufting
Indirect material			3400	2700
Indirect Labour			11900	11800
Depreciation			5400	4000
Prepaid insurance expired			1100	800
Total OH incurred			21800	19300
OH applied			22200	18950
Balance in Overheads account			400	350
			Credit	Debit