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: S62,000 35,000 Finished Goods Work in Process-Spinning Department Work Process-Tufting Department Materials 28,500 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: Jan. 1 Materials purchased on account, $500,000 2 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 31 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 Indirect labor-Tufting Department, $9,000 31 Depreciation charged on fixed assets: Spinning Department, $12,500 Tufting Department, $8,500 31 Expired prepaid factory insurance: Spinning Department, $2,000 Tufting Department, $1,000 31 Applied factory overhead: Spinning Department, $80,000 Tufting Department, $55,000 31 Production costs transferred from Spinning Department to Tufting Department, $547,000 Production costs transferred from Tufting Department to Finished Goods, $807,200 31 31 Cost of goods sold during the period, $795,200 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 Port Ormond Carpet Company General Ledger ASSETS REVENUE 110 Cash 410 Sales 121 Accounts Receivable 610 Interest Revenue 125 Notes Receivable 126 Interest Receivable EXPENSES 131 Materials 510 Cost of Goods Sold 141 Work in Process-Spinning Department 520 Wages Expense 142 Work in Process-Tufting Department 531 Selling Expense 151 Factory Overhead-Spinning Department 532 Insurance Expense 152 Factory Overhead-Tufting Department 533 Utilities Expense 161 Finished Goods 534 Supplies Expense 171 Supplies 540 Administrative Expense 172 Prepaid Insurance 561 Depreciation Expense-Factory 173 Prepaid Expenses 590 Miscellaneous Expense 181 Land 710 Interest Expense 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
