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	$8,300
Work in Process-Spinning Department	2,000
Work in Process-Tufting Department	2,600
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, $82,000
	2	Materials requisitioned for use:
		Fiber-Spinning Department, $42,600
		Carpet backing-Tufting Department, $34,700
		Indirect materials-Spinning Department, $3,300
		Indirect materials-Tufting Department, $2,900
	31	Labor used:
		Direct labor-Spinning Department, $26,300
		Direct labor-Tufting Department, $17,200
		Indirect labor-Spinning Department, $12,500
		Indirect labor-Tufting Department, $11,900
	31	Depreciation charged on fixed assets:
		Spinning Department, $5,300
		Tufting Department, $3,100
	31	Expired prepaid factory insurance:
		Spinning Department, $1,000
		Tufting Department, $800
	31	Applied factory overhead:
		Spinning Department, $22,400
		Tufting Department, $18,250
	31	Production costs transferred from Spinning Department to Tufting Department, $90,000
	31	Production costs transferred from Tufting Department to Finished Goods, $153,200
	31	Cost of goods sold during the period, $158,000

	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				82,000
	Accounts payable					82,000
b.	work in process-spinning Deptt				42,600
	work in process-tufting Deptt				34,700
	Factory overhead -spinning Deptt				3,300
	Factory overhead -tufting Deptt				2,900
	Materials					83,500
c.	work in process-spinning Deptt				26,300
	work in process-tufting Deptt				17,200
	Factory overhead -spinning Deptt				12,500
	Factory overhead -tufting Deptt				11,900
	Wages payable					67,900
d.	Factory overhead -spinning Deptt				5,300
	Factory overhead -tufting Deptt				3,100
	Accumulated Depreciation					8,400
e	Factory overhead -spinning Deptt				1,000
	Factory overhead -tufting Deptt				800
	prepaid insurance					1,800
f.	work in process-spinning Deptt				22,400
	work in process-tufting Deptt				18,250
	Factory overhead -spinning Deptt					22,400
	Factory overhead -tufting Deptt					18,250
g.	work in process-tufting department				90,000
	work in process-spinning department					90,000
h.	finished goods				153,200
	work in process-tufting department					153,200
i.	cost of goods sold				158,000
	finished goods					158,000
2)	materials				3,300
	work in process -spinning Department				3,300
	work in process-tufting Department				9,550
	finished goods				3,500
	t-Accounts
	materials
	opening	4,800	Requistioned		83,500
	purchases	82,000
	end bal	3,300
	work in process-spinning deptt
	opening	2,000
	DM	42,600	trfg -packing deptt		90,000
	DL	26,300
	OH applied	22,400
	end bal	3,300
	work in process-tuftingg deptt
	opening	2,600
	trfd making	90,000
	DM	34,700	finished goods		153,200
	DL	17,200
	OH applied	18,250
	end bal	9,550
	finished goods
	opening	8,300	cost of goods sold		158,000
	WIP-packing	153,200
	end bal	3,500
3)	Factory overhea-spinning department				300	Credit
	Factory overhead -tuffting department				450	Debit
	Factory overhead-spinning department
	indirect mt	3,300	WIP		22,400
	ind lab	12,500
	dep	5,300
	prepaid	1,000
			end bal		300
	Factory overhead-tufting department
	indirect mt	2,900	WIP		18,250
	ind lab	11,900
	dep	3,100
	prepaid	800
	end bal	450