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 $$7,200$

Work in Process$-$Spinning Department $1,000$

Work in Process$-$Tufting Department $2,400$

Materials $4,300$

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, $$80,000$

$2$ Materials requisitioned for use:

Fiber$-$Spinning Department, $$42,000$

Carpet backing$-$Tufting Department, $$34,600$

Indirect materials$-$Spinning Department, $$3,000$

Indirect materials$-$Tufting Department, $$2,900$

$31$ Labor used:

Direct labor$-$Spinning Department, $$26,900$

Direct labor$-$Tufting Department, $$17,800$

Indirect labor$-$Spinning Department, $$11,700$

Indirect labor$-$Tufting Department, $$11,800$

$31$ Depreciation charged on fixed assets:

Spinning Department, $$5,300$

Tufting Department, $$3,500$

$31$ Expired prepaid factory insurance:

Spinning Department, $$1,300$

Tufting Department, $$1,000$

$31$ Applied factory overhead:

Spinning Department, $$21,500$

Tufting Department, $$18,850$

$31$ Production costs transferred from Spinning Department to Tufting Department, $$85,000$

$31$ Production costs transferred from Tufting Department to Finished Goods, $$152,600$

$31$ Cost of goods sold during the period, $$155,300$

Required:

$1.$ Journalize the entries to record the operations, using the dates provided with the summary of manufacturing operations.

$2.$ 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

$110$ 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

$390$ Income Summary

REVENUE

$410$ Sales

$610$ Interest Revenue

EXPENSES

$510$ Cost of Goods Sold

$520$ Wages Expense

$531$ Selling Expenses

$532$ Insurance Expense

$533$ Utilities Expense

$534$ Supplies Expense

$540$ Administrative Expenses

$561$ Depreciation Expense$-$Factory

$590$ Miscellaneous Expense

$710$ Interest Expense

$1.$ Journalize the entries to record the operations, using the dates provided with the summary of manufacturing operations.

General Journal Instructions

PAGE $10$

JOURNALACCOUNTING EQUATION

DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY

Jan. $1$

Materials

$80,000\mathrm{.}00$

$$

Accounts Payable

$80,000\mathrm{.}00$

$$

Jan. $2$

Work in Process$-$Spinning Department

$42,000\mathrm{.}00$

$$

Work in Process$-$Tufting Department

$34,600\mathrm{.}00$

$$

Factory Overhead$-$Spinning Department

$3,000\mathrm{.}00$

$$

Factory Overhead$-$Tufting Department

$2,900\mathrm{.}00$

$$

Materials

$82,500\mathrm{.}00$

$$

Jan. $31$

Work in Process$-$Spinning Department

$26,900\mathrm{.}00$

$$

Work in Process$-$Tufting Department

$17,800\mathrm{.}00$

$$

Factory Overhead$-$Spinning Department

$11,700\mathrm{.}00$

$$

Factory Overhead$-$Tufting Department

$11,800\mathrm{.}00$

$$

Wages Payable

$68,200\mathrm{.}00$

$$

Jan. $31$

Factory Overhead$-$Spinning Department

$5,300\mathrm{.}00$

$$

Factory Overhead$-$Tufting Department

$3,500\mathrm{.}00$

$$

Jan. $31$

Accumulated Depreciation$-$Factory

$8,800\mathrm{.}00$

$$

Jan. $31$

Factory Overhead$-$Tufting Department

$1,300\mathrm{.}00$

$$

Factory Overhead$-$Tufting Department

$1,000\mathrm{.}00$

$$

Jan. $31$

Prepaid Insurance

$2,300\mathrm{.}00$

$$

Work in Process$-$Spinning Department

$18,850\mathrm{.}00$

$$

Work in Process$-$Tufting Department

$21,500\mathrm{.}00$

$$

Factory Overhead$-$Spinning Department

$40,350\mathrm{.}00$

$$

Factory Overhead$-$Tufting Department

$85,000\mathrm{.}00$

$$

Jan. $31$

Work in Process$-$Spinning Department

$85,000\mathrm{.}00$

$$

Jan. $31$

Work in Process$-$Tufting Department

$152,600\mathrm{.}00$

$$

Jan. $31$

Finished Goods

$152,600\mathrm{.}00$

$$

Jan. $31$

Work in Process$-$Tufting Department

$155,300\mathrm{.}00$

$$

Jan. $31$

Cost of Goods Sold

$155,300\mathrm{.}00$

$$

Finished Goods

$155,300\mathrm{.}00$

$$

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

Additional Instruction

Materials

$$1,800$

Debit

Work in Process:

$$ Spinning Department

$$6,400$

Debit

$$ Tufting Department

$$6,050$

Debit

Finished Goods

$$4,500$

Debit

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

Additional Instruction

Factory Overhead:

$$ Spinning Department

$$200$

Credit

$$ Tufting Department

$$350$

Debit