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 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				500,000
	Accounts payable					500,000
b.	work in process-spinning Deptt				275,000
	work in process-tufting Deptt				110,000
	Factory overhead -spinning Deptt				46,000
	Factory overhead -tufting Deptt				39,500
	Materials					470,500
c.	work in process-spinning Deptt				185,000
	work in process-tufting Deptt				98,000
	Factory overhead -spinning Deptt				18,500
	Factory overhead -tufting Deptt				9,000
	Wages payable					310,500
d.	Factory overhead -spinning Deptt				12,500
	Factory overhead -tufting Deptt				8,500
	Accumulated Depreciation					21,000
e	Factory overhead -spinning Deptt				2,000
	Factory overhead -tufting Deptt				1,000
	prepaid insurance					3,000
f.	work in process-spinning Deptt				80,000
	work in process-tufting Deptt				55,000
	Factory overhead -spinning Deptt					80,000
	Factory overhead -tufting Deptt					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
	work in process -spinning Department				28,000
	work in process-tufting Department				31,300
	finished goods				74,000
	t-Accounts
	materials
	opening	17,000	Requistioned		470,500
	purchases	500,000
	end bal	46,500
	work in process-spinning deptt
	opening	35,000
	DM	275,000	trfg -packing deptt		547,000
	DL	185,000
	OH applied	80,000
	end bal	28,000
	work in process-tuftingg deptt
	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 overhea-spinning department				1,000	Credit
	Factory overhead -tuffting 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