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	$8,200
Work in Process-Spinning Department	1,800
Work in Process-Tufting Department	2,900
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, $82,700
	2	Materials requisitioned for use:
		Fiber-Spinning Department, $43,800
		Carpet backing-Tufting Department, $34,900
		Indirect materials-Spinning Department, $3,200
		Indirect materials-Tufting Department, $2,800
	31	Labor used:
		Direct labor-Spinning Department, $27,000
		Direct labor-Tufting Department, $17,400
		Indirect labor-Spinning Department, $11,600
		Indirect labor-Tufting Department, $11,700
	31	Depreciation charged on fixed assets:
		Spinning Department, $5,200
		Tufting Department, $3,100
	31	Expired prepaid factory insurance:
		Spinning Department, $1,500
		Tufting Department, $1,000
	31	Applied factory overhead:
		Spinning Department, $21,850
		Tufting Department, $18,350
	31	Production costs transferred from Spinning Department to Tufting Department, $86,000
	31	Production costs transferred from Tufting Department to Finished Goods, $152,800
	31	Cost of goods sold during the period, $157,900

	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 the exact wording of the account titles. CNOW journals do not use lines for spaces or journal explanations. Every line on a journal page is used for debit or credit entries. Do not add explanations or skip a line between journal entries. CNOW journals will automatically indent a credit entry when a credit amount is entered.
2.	Compute the January 31 balances of the inventory accounts.*
3.	Compute the January 31 balances of the factory overhead accounts.*
	*Enter your amounts in positive value.

Answer 1

Item	Account				Debit	Credit
a.	Materials				82,700
	Accounts payable					82,700
b.	work in process-spinning Deptt				43,800
	work in process-tufting Deptt				34,900
	Factory overhead -spinning Deptt				3,200
	Factory overhead -tufting Deptt				2,800
	Materials					84,700
c.	work in process-spinning Deptt				27,000
	work in process-tufting Deptt				17,400
	Factory overhead -spinning Deptt				11,600
	Factory overhead -tufting Deptt				11,700
	Wages payable					67,700
d.	Factory overhead -spinning Deptt				5,200
	Factory overhead -tufting Deptt				3,100
	Accumulated Depreciation					8,300
e	Factory overhead -spinning Deptt				1,500
	Factory overhead -tufting Deptt				1,000
	prepaid insurance					2,500
f.	work in process-spinning Deptt				21,850
	work in process-tufting Deptt				18,250
	Factory overhead -spinning Deptt					21,850
	Factory overhead -tufting Deptt					18,250
g.	work in process-tufting department				86,000
	work in process-spinning department					86,000
h.	finished goods				152,800
	work in process-tufting department					152,800
i.	cost of goods sold				157,900
	finished goods					157,900
2)	materials				2,800
	work in process -spinning Department				8,450
	work in process-tufting Department				6,650
	finished goods				3,100
	t-Accounts
	materials
	opening	4,800	Requistioned		84,700
	purchases	82,700
	end bal	2,800
	work in process-spinning deptt
	opening	1,800
	DM	43,800	trfg -packing deptt		86,000
	DL	27,000
	OH applied	21,850
	end bal	8,450
	work in process-tuftingg deptt
	opening	2,900
	trfd making	86,000
	DM	34,900	finished goods		152,800
	DL	17,400
	OH applied	18,250
	end bal	6,650
	finished goods
	opening	8,200	cost of goods sold		157,900
	WIP-packing	152,800
	end bal	3,100
3)	Factory overhea-spinning department				350	Credit
	Factory overhead -tuffting department				350	Debit
	Factory overhead-spinning department
	indirect mt	3,200	WIP		21,850
	ind lab	11,600
	dep	5,200
	prepaid	1,500
			end bal		350
	Factory overhead-tufting department
	indirect mt	2,800	WIP		18,250
	ind lab	11,700
	dep	3,100
	prepaid	1,000
	end bal	350