Answer:
Port Ormond Carpet Company
1. Journal Entries:
Jan. 1:
Debit Materials $82,000
Credit Accounts payable $82,000
To record the purchase of materials on account.
Jan. 2:
Debit Work-in-Process - Spinning $42,600
Credit Materials $42,600
To record the materials requisitioned.
Jan. 2:
Debit Work-in-Process -Tufting $34,700
Credit Materials $34,700
To record carpet backing
Jan. 2:
Debit Overhead - Spinning $3,300
Debit Overhead - Tufting $2,900
Credit Materials $6,200
To record indirect materials used.
Jan. 31:
Debit Work-in-Process - Spinning $26,300
Debit Work-in-Process - Tufting $17,200
Credit Factory labor $43,500
To record direct labor costs.
Jan. 31:
Debit Overhead - Spinning $12,500
Debit Overhead - Tufting $11,900
Credit Factory labor $24,400
To record indirect labor costs.
Jan. 31:
Debit Overhead - Spinning $5,300
Debit Overhead - Tufting $3,100
Credit Factory Depreciation $8,400
To record depreciation costs.
Jan. 31:
Debit Overhead - Spinning $1,000
Debit Overhead - Tufting $800
Credit Factory Insurance $1,800
To record insurance costs.
Jan. 31:
Debit Work-in-Process - Spinning $22,400
Debit Work-in-Process - Tufting $18,250
Credit Factory Overhead $40,650
To record overhead costs applied.
Jan. 31:
Debit Work-in-Process - Tufting $90,000
Credit Work-in-Process - Spinning $90,000
To record the transfer to Tufting department.
Debit Finished Goods Inventory $153,200
Credit Work-in-Process- Tufting $153,200
To record the transfer to Finished Goods.
Jan. 31:
Debit Cost of Goods Sold $158,000
Credit Finished Goods $158,000
To record the cost of goods sold.
2. January 31 balances of the inventory accounts:
Finished Goods = $3,500
Work-in-Process - Spinning = $3,300
Work-in-Process - Tufting = $9,550
Materials = $600
3. Factory Overhead Accounts- Spinning:
Account Titles Debit Credit
Jan. 31 Materials (Indirect) 3,300
Indirect labor 12,500
Depreciation exp. 5,300
Factory insurance 1,000
Applied overhead 22,400
Overapplied overhead 300
Factory Overhead Accounts- Tufting:
Account Titles Debit Credit
Materials (Indirect) $2,900
Indirect labor 11,900
Depreciation expenses 3,100
Insurance expense 800
Applied overhead -WIP-Tufting 18,250
Underapplied overhead 450
Explanation:
a) Data and Calculations:
January 1 Inventories:
Finished Goods = $3,500
Work in Process- Spinning = $2,000
Work in Process - Tufting = $2,600
Materials = $4,800
Finished Goods
Account Titles Debit Credit
Beginning balance $8,300
Work-in-Process-Tufting 153,200
Cost of Goods Sold $158,000
Ending balance 3,500
Work-in-Process - Spinning
Account Titles Debit Credit
Beginning balance $2,000
Materials 42,600
Direct labor 26,300
Applied overhead 22,400
Work-in-Process -Tufting $90,000
Ending balance 3,300
Work-in-Process - Tufting
Account Titles Debit Credit
Beginning balance $2,600
Carpet backing 34,700
Direct labor 17,200
Applied overhead 18,250
WIP- Spinning 90,000
Finished Goods $153,200
Ending balance 9,550
Cost of Goods Sold
Finished Goods $158,000
Materials
Account Titles Debit Credit
Beginning balance $4,800
Accounts payable 82,000
Work-in-Process - Spinning $42,600
Work-in-Process - Tufting 37,400
Manufacturing overhead- Spinning 3,300
Manufacturing overhead- Tufting 2,900
Ending balance 600