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	$6,000
Work in Process-Spinning Department	1,300
Work in Process-Tufting Department	2,100
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, $81,300
	2	Materials requisitioned for use:
		FiberSpinning Department, $42,000
		Carpet backingTufting Department, $34,000
		Indirect materialsSpinning Department, $3,300
		Indirect materialsTufting Department, $2,500
	31	Labor used:
		Direct laborSpinning Department, $26,800
		Direct laborTufting Department, $18,700
		Indirect laborSpinning Department, $11,500
		Indirect laborTufting Department, $11,700
	31	Depreciation charged on fixed assets:
		Spinning Department, $5,300
		Tufting Department, $3,300
	31	Expired prepaid factory insurance:
		Spinning Department, $1,200
		Tufting Department, $1,100
	31	Applied factory overhead:
		Spinning Department, $21,700
		Tufting Department, $18,400
	31	Production costs transferred from Spinning Department to Tufting Department, $86,500
	31	Production costs transferred from Tufting Department to Finished Goods, $153,600
	31	Cost of goods sold during the period, $155,200

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

Chart of Accounts

CHART OF ACCOUNTS

Port Ormond Carpet Company

General 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

	REVENUE
410	Sales
610	Interest Revenue

	EXPENSES
510	Cost of Goods Sold
520	Wages Expense
531	Selling Expense
532	Insurance Expense
533	Utilities Expense
534	Supplies Expense
540	Administrative Expense
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

ACCOUNTING EQUATION

	DATE	DESCRIPTION	POST. REF.	DEBIT	CREDIT	ASSETS	LIABILITIES	EQUITY
1
2
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12
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28

Final Questions

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

Materials
Work in Process:
Spinning Department
Tufting Department
Finished Goods

3. Compute the January 31 balances of the factory overhead accounts. Enter all amounts as positive numbers.

Factory Overhead:
Spinning Department
Tufting Department