Port Ormond Carpet Company manufactures carpets. Fiber is placed in process in t
ID: 2516460 • Letter: P
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:
Departmental accounts are maintained for factory overhead, and both have zero balances on January 1. Manufacturing operations for January are summarized as follows:
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.
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JOURNAL
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2. Compute the January 31 balances of the inventory accounts.
3. Compute the January 31 balances of the factory overhead accounts. Enter all amounts as positive numbers.
Finished Goods $6,000 Work in Process-Spinning Department 1,300 Work in Process-Tufting Department 2,100 Materials 4,800Explanation / Answer
PORT ORMOND CARPET COMPANY JOURNAL S.No. DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITY 1 01-Jan Materials 131 81,300 81,300 Accounts Payable 210 81,300 81,300 (Being the purchase of materials on account). 2 02-Jan Work-in-Process - Spinning Department 141 42,000 42,000 Work-in-Process - Tufting Department 142 34,000 34,000 Factory Overhead - Spinning 151 3,300 3,300 Factory Overhead - Tufting 152 2,500 2,500 Materials 131 81,800 81,800 - (Being the issue of fiber and carpet backing requisitioned by Spinning and Tufting Department transferred to respecrtive Work-in-Progress accounts respectively. Indirect Materials requistioned by the Spinning and Tufting departments transferred to respective Factory Overhead accounts respectively). 3 31-Jan Work-in-Process - Spinning Department 141 26,800 26,800 Work-in-Process - Tufting Department 142 18,700 18,700 Factory Overhead - Spinning 151 11,500 11,500 Factory Overhead - Tufting 152 11,700 11,700 Wages Payable 251 68,700 68,700 (Being the entry to record direct Labor used in Spinning,Tufting respectively. Indirect Labor used in the Spinning and Tufting department transferred to Factory Overhead account) 4 31-Jan Factory Overhead - Spinning 151 5,300 5,300 Factory Overhead - Tufting 152 3,300 3,300 Accumulated Depreciation - Factory 192 8,600 8,600 (Being the entry to record the depreciation charged on fixed assets employed in the Spinning and Tufting departments respectively). 5 31-Jan Factory Overhead - Spinning 151 1,200 1,200 Factory Overhead - Tufting 152 1,100 1,100 Prepaid Insurance 172 2,300 2,300 (Being the entry to record expired prepaid insurance. The insurance expense is debitted to Factory Overhead - Spinning and Tufting deparments respectively). 6 31-Jan Work-in-Process - Spinning Department 141 21,700 21,700 Work-in-Process - Tufting Department 142 18,400 18,400 Factory Overhead - Spinning 151 21,700 21,700 Factory Overhead - Tufting 152 18,400 18,400 (Being the applied factory overhead for the Spinning and Tufting Department transferred to Work-in-Progress account of Spinning and Tufting department respectively). 7 31-Jan Work-in-Process - Tufting Department 142 86,500 86,500 Work-in-Process - Spinning Department 141 86,500 86,500 (Being the transfer of work-in-process from Spinning to Tufting department) 8 31-Jan Finished Goods 161 153,600 153,600 Work-in-Process- Tufting Department 142 153,600 153,600 (Being the transfer of work-in-process from Tufting department to Finished Goods) 9 31-Jan Cost of Goods Sold 510 155,200 155,200 Finished Goods 161 155,200 155,200 (Being the entry to record cost of goods sold for the month of January) TOTAL 1,206,200 150,000 1,056,200 Q 2 ) Balances of Inventory Accounts as on January 31 Answer Opening Balance Debit Credit Closing Balance Jan-01 Jan-31 Materials 4,800 81,300 (81,800) 4,300 Work-in-Process: - Spinning Department - See Note 1 for calculation of debits 1,300 90,500 (86,500) 5,300 - Tufting Department - See Note 2 for calaculation of debits 2,100 157,600 (153,600) 6,100 Finished Goods 6,000 153,600 (155,200) 4,400 14,200 483,000 (477,100) 20,100 Woking Notes for Debit Balances: Work-in-Process : Spinning Dept: $ 42,000+$26800+$21700: Journal Nos.2,3 &6 90,500 Work-in-Process : Tufting Dept: $34,000+$18,700+$18,400+$86,500: Journal Nos.2,3,6&7 157,600 Woking Notes for Credit Balances: Work-in-Process : Spinning Dept: $86,500: Journal Nos. 7 Work-in-Process : Tufting Dept: $153,600: Journal Nos.8 Q 3) Balances of Factory Overhead Accounts as on January 31 Answer Opening Balance Debit Credit Closing Balance Jan-01 Jan-31 Factory Overhead - Spinning - 21,300 (21,700) (400) Cr Factory Overhead - Tufting - 18,600 (18,400) 200 Dr. Woking Notes for Debits: Factory Overhead : Spinning Dept: $3,300+11,500+5,300+1,200 Journal Nos.2,3,4,5 Factory Overhead : Tufting Dept: $2,500+$11,700+$3,300+$1,100: Journal Nos.2,3,4,5 Woking Notes for Credits: Factory Overhead : Spinning Dept: $21,700 Journal Nos.6 Factory Overhead : Tufting Dept: $18,400: Journal Nos.6