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:

A. Materials purchased on account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . $500,000

B. 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

C. 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

D. Depreciation charged on fixed assets:

Spinning Department . . . . . . . . . . . . . .. . . . .. . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,500

Tufting Department . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,500

E. Expired prepaid factory insurance

Spinning Department . . . . . . . . . .. . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,000

Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000

F. Applied factory overhead:

Spinning Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$80,000

Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55,000

G. Production costs transferred from Spinning Department to Tufting Department . $547,000

H. Production costs transferred from Tufting Department to Finished Goods . . . . . . $807,200

I. Cost of goods sold during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$795,200

Instructions

1. Journalize the entries to record the operations, identifying each entry by letter.

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

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