Port Ormond Carpet Company manufactures carpets. Fiber is placed in process in t
ID: 2555110 • 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:
CHART OF ACCOUNTSPort Ormond Carpet CompanyGeneral Ledger
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.
Finished Goods $62,000 Work in Process-Spinning Department 35,000 Work in Process-Tufting Department 28,500 Materials 17,000Explanation / Answer
Date Account Debit Credit 1 Raw Material Inventory 500000 Accounts Payable 500000 2 Work in process inventory-Spinning 275000 Work in process inventory-Tufting 110000 Factory Overhead-Spinning 46000 Factory Overhead-Tufting 39500 Raw Material Inventory 470500 31 Work in process inventory-Spinning 185000 Work in process inventory-Tufting 98000 Manufacturing Overhead-Spinning 18500 Manufacturing Overhead-Tufting 9000 Labor cost payable 310500 31 Depreciation Expense-Spinning 12500 Depreciation Expense-Tufting 8500 Accumulated Depreciation 21000 31 Insurance Expense-Spinning 2000 Insurance Expense-Tufting 1000 Prepaid Insurance 3000 31 Work in process inventory-Spinning 80000 Work in process inventory-Tufting 55000 Factory Overhead-Spinning 80000 Factory Overhead-Tufting 55000 31 Work in process inventory-Tufting 547000 Work in process inventory-Spinning 547000 31 Finished Goods inventory 807200 Work in process inventory-Tufting 807200 31 Cost of Goods Sold 795200 Finished Goods inventory 795200 Finished Goods Beginning 62000 795200 Cost of Goods Sold Work in process inventory-Tufting 807200 74000 Balance 869200 869200 Raw Material Beginning 17000 Accounts Payable 500000 275000 Work in process inventory-Spinning 110000 Work in process inventory-Tufting 46000 Factory Overhead-Spinning 39500 Factory Overhead-Tufting 46500 Balance 517000 517000 Work in process inventory-Spinning Beginning 35000 547000 Work in process inventory-Tufting Raw Material Inventory 275000 28000 Ending WIP-Spinning Labor Cost payable 185000 Factory Overhead 80000 575000 575000 Work in process inventory-Tufting Beginning 28500 807200 Finished Goods inventory Raw Material Inventory 110000 31300 Ending Finished Goods inventory Labor Cost payable 98000 Factory Overhead 55000 Work in process inventory-Spinning 547000 838500 838500 Factory Overheads Raw Material Inventory 46000 80000 Work in process inventory-Spinning Raw Material Inventory 39500 55000 Work in process inventory-Tufting Depreciation 21000 Insurance 3000 Balance 25500 135000 135000