Question

FloorMate 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 October 1, FloorMate Carpet Company had the following inventories:

Finished Goods	$7,200
Work in Process-Spinning Department	1,000
Work in Process-Tufting Department	2,400
Materials	4,300

Departmental accounts are maintained for factory overhead, and both have zero balances on October 1. Manufacturing operations for October are summarized as follows:

Oct.	1	Materials purchased on account, $80,000
	2	Materials requisitioned for use:
		Fiber—Spinning Department, $42,000
		Carpet backing—Tufting Department, $34,600
		Indirect materials—Spinning Department, $3,000
		Indirect materials—Tufting Department, $2,900
	31	Labor used:
		Direct labor—Spinning Department, $26,900
		Direct labor—Tufting Department, $17,800
		Indirect labor—Spinning Department, $11,700
		Indirect labor—Tufting Department, $11,800
	31	Depreciation charged on fixed assets:
		Spinning Department, $5,300
		Tufting Department, $3,500
	31	Expired prepaid factory insurance:
		Spinning Department, $1,300
		Tufting Department, $1,000
	31	Applied factory overhead:
		Spinning Department, $21,500
		Tufting Department, $18,850
	31	Production costs transferred from Spinning Department to Tufting Department, $85,000
	31	Production costs transferred from Tufting Department to Finished Goods, $152,600
	31	Cost of goods sold during the period, $155,300

	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 October 31 balances of the inventory accounts.
3.	Compute the October 31 balances of the factory overhead accounts.

Charts of Accounts:

CHART OF ACCOUNTSFloorMate Carpet CompanyGeneral 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

	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

Journal:

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.

PAGE 10

JOURNAL

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT
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Final Questions:

2. Compute the October 31 balances of the inventory accounts.

Materials
Work in Process:
• Spinning Department
• Tufting Department
Finished Goods

3. Compute the October 31 balances of the factory overhead accounts.

Factory Overhead:
• Spinning Department
• Tufting Department

Answer 1

1. In the books of FloorMate Carpet Company:

Date	Description	Debit	Credit
		$	$
Oct 1	Materials	80,000
	Accounts Payable		80,000
Oct 2	Work in Process: Spinning Department	42,000
	Work in Process: Tufting Department	34,600
	Factory Overhead : Spinning Department	3,000
	Factory Overhead: Tufting Department	2,900
	Materials		82,500
Oct 31	Work in Process: Spinning Department	26,900
	Work in Process: Tufting Department	17,800
	Factory Overhead : Spinning Department	11,700
	Factory Overhead: Tufting Department	11,800
	Wages Payable		68,200
Oct 31	Factory Overhead: Spinning Department	5,300
	Factory Overhead : Tufting Department	3,500
	Accumulated Depreciation : Factory		8,800
Oct 31	Factory Overhead: Spinning Department	1,300
	Factory Overhead : Tufting Department	1,000
	Prepaid Insurance		2,300
Oct 31	Work in Process: Spinning Department	21,500
	Work in Process: Tufting Department	18,850
	Factory Overhead : Spinning Department		21,500
	Factory Overhead : Tufting Department		18,850
Oct 31	Work in Process: Tufting Department	85,000
	Work in Process: Spinning Department		85,000
Oct 31	Finished Goods	152,600
	Work in Process: Tufting Department		152,600
Oct 31	Cost of Goods Sold	155,300
	Finished Goods		155,300

2. Materials:

Bal, Oct 1	4,300	Work in Process: Spinning	42,000
Accounts Payable	80,000	Work in Process: Tufting	34,600
		Factory Overhead: Spinning	3,000
		Factory Overhead: Tufting	2,900
Bal, Oct 31	1,800

Work in Process: Spinning Department:

Bal, Oct 1	1,000	Work in Process: Tufting Department	85,000
Materials	42,000
Wages Payable	26,900
Factory Overhead	21,500
Bal, Oct 31	6,400

Work in Process: Tufting Department

Bal, Oct 1	2,400	Finished Goods	152,600
Materials	34,600
Wages Payable	17,800
Factory Overhead	18,850
Work in Process: Spinning Department	85,000
Bal, Oct 31	6,050

Finished Goods:

Bal, Oct 1	7,200	Finished Goods	155,300
Work in Process: Tufting Department	152,600
Bal, Oct 31	4,500

3.

Factory Overhead
Spinning Department	$ 200 Cr.
Tufting Department	$ 350 Dr.