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	$62,000
Work in Process-Spinning Department	35,000
Work in Process-Tufting Department	28,500
Materials	17,000

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, $500,000
	2	Materials requisitioned for use:
		Fiber—Spinning Department, $275,000
		Carpet backing—Tufting Department, $110,000
		Indirect materials—Spinning Department, $46,000
		Indirect materials—Tufting Department, $39,500
	31	Labor used:
		Direct labor—Spinning Department, $185,000
		Direct labor—Tufting Department, $98,000
		Indirect labor—Spinning Department, $18,500
		Indirect labor—Tufting Department, $9,000
	31	Depreciation charged on fixed assets:
		Spinning Department, $12,500
		Tufting Department, $8,500
	31	Expired prepaid factory insurance:
		Spinning Department, $2,000
		Tufting Department, $1,000
	31	Applied factory overhead:
		Spinning Department, $80,000
		Tufting Department, $55,000
	31	Production costs transferred from Spinning Department to Tufting Department, $547,000
	31	Production costs transferred from Tufting Department to Finished Goods, $807,200
	31	Cost of goods sold during the period, $795,200

	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

1) Journal Entries:-

Item	Particulars	Debit	Credit
a.	Materials	500,000
	Accounts payable		500,000
b.	work in process-spinning Dept.	275,000
	work in process-tufting Dept.	110,000
	Factory overhead -spinning Dept.	46,000
	Factory overhead -tufting Dept.	39,500
	Materials		470,500
c.	work in process-spinning Dept	185,000
	work in process-tufting Dept.	98,000
	Factory overhead -spinning Dept.	18,500
	Factory overhead -tufting Dept.	9,000
	Wages payable		310,500
d.	Factory overhead -spinning Dept.	12,500
	Factory overhead -tufting Dept.	8,500
	Accumulated Depreciation		21,000
e	Factory overhead -spinning Dept.	2,000
	Factory overhead -tufting Dept.	1,000
	prepaid insurance		3,000
f.	work in process-spinning Dept.	80,000
	work in process-tufting Dept.	55,000
	Factory overhead -spinning Dept.		80,000
	Factory overhead -tufting Dept.		55,000
g.	work in process-tufting department	547,000
	work in process-spinning department		547,000
h.	finished goods	807,200
	work in process-tufting department		807,200
i.	cost of goods sold	795,200
	finished goods		795,200

2)	materials				46,500	Debit
	work in process -spinning Department				28,000	Debit
	work in process-tufting Department				31,300	Debit
	finished goods				74,000	Debit
T-Accounts
materials
	Opening	17,000	Requisitioned		470,500
	Purchases	500,000
	End bal	46,500
work in process-spinning dept.
	Opening	35,000
	DM	275,000	trfg -packing dept		547,000
	DL	185,000
	OH applied	80,000
	End bal	28,000
work in process-tufting dept.
	Opening	28,500
	trfd making	547,000
	DM	110,000	finished goods		807,200
	DL	98,000
	OH applied	55,000
	End bal	31,300
finished goods
	Opening	62,000	cost of goods sold		795,200
	WIP-packing	807,200
	End bal	74,000

3)	Factory overhead-spinning department			1,000	Credit
	Factory overhead -tufting department			3,000	Debit
Factory overhead-spinning department
	indirect mt	46,000	WIP	80,000
	ind lab	18,500
	dep	12,500
	prepaid	2,000
			end bal	1,000
Factory overhead-tufting department
	indirect mt	39,500	WIP	55,000
	ind lab	9,000
	dep	8,500
	prepaid	1,000
	End bal	3,000

i hope it is useful to u if u have any doubt plz comment plz give me up thumb