Answer:
Port Ormond Carpet Company
1. Journal Entries:
Jan. 31 Debit Materials $500,000
Credit Accounts payable $500,000
To record the purchase of materials on account.
Jan. 31 Debit Work-in-Process - Spinning $275,000
Credit Materials $275,000
To record the materials requisitioned.
Jan. 31 Debit Work-in-Process -Tufting $110,000
Credit Materials $110,000
To record carpet backing
Jan. 2 Debit Factory Overhead - Spinning $46,000
Debit Factory Overhead - Tufting $39,500
Credit Materials $85,500
To record indirect materials used.
Jan. 31 Debit Work-in-Process - Spinning $185,000
Debit Work-in-Process - Tufting $98,000
Credit Factory Payroll $283,000
To record direct labor costs.
Jan 31: Debit Overhead - Spinning $18,500
Debit Overhead - Tufting $9,000
Credit Factory Payroll $27,500
To record indirect labor costs.
Jan. 31: Debit Factory Overhead - Spinning $12,500
Debit Factory Overhead - Tufting $8,500
Credit Factory Depreciation Expense $21,000
To record depreciation costs.
Jan. 31:
Debit Factory Overhead - Spinning $2,000
Debit Factory Overhead - Tufting $1,000
Credit Factory Insurance $3,000
To record insurance costs.
Jan. 31 Debit Work-in-Process - Spinning $80,000
Credit Factory Overhead - Spinning $80,000
To record overhead costs applied.
Jan. 31 Debit Work-in-Process - Tufting $55,000
Credit Factory Overhead $55,000
To record overhead costs applied.
Jan. 31 Debit Work-in-Process - Tufting $547,000
Credit Work-in-Process - Spinning $547,000
To record the transfer to Tufting department.
Jan. 31 Debit Finished Goods Inventory $807,200
Credit Work-in-Process- Tufting $807,200
To record the transfer to Finished Goods.
Jan. 31 Debit Cost of Goods Sold $795,200
Credit Finished Goods $795,200
To record the cost of goods sold.
2. January 31 balances of the inventory accounts:
Finished Goods = $74,000
Work-in-Process - Spinning = $28,000
Work-in-Process - Tufting = $31,300
Materials = $46,500
3. Factory Overhead Accounts Balances: 
Spinning $1,000 (Debit)  
Tufting $3,000 (Credit)
Explanation:
a) Data and Calculations:
January 1 Inventories:
Finished Goods = $62,000
Work in Process- Spinning = $35,000
Work in Process - Tufting = $28,500
Materials = $17,000
Finished Goods
Account Titles                                Debit      Credit
Jan. 1 Beginning balance           $62,000
Jan. 2 Work-in-Process-Tufting 807,200
Jan. 31 Cost of Goods Sold                     $795,200
Jan. 31 Ending balance                                74,000
Work-in-Process - Spinning
Account Titles                   Debit      Credit
Beginning balance        $35,000
Jan. 2 Materials            275,000
Jan. 31 Direct labor       185,000
    Applied overhead      80,000
     Work-in-Process -Tufting        $547,000
Jan. 31 Ending balance                   28,000    
Work-in-Process - Tufting
Account Titles                             Debit      Credit
Jan. 1 Beginning balance        $28,500
Jan. 2 Carpet backing              110,000
Jan. 31 Direct labor                   98,000
  Jan. 31 Applied overhead        55,000
Jan. 31 WIP- Spinning            547,000
Jan. 31 Finished Goods                        $807,200
Jan. 31 Ending balance                              31,300
Cost of Goods Sold
Account Titles                             Debit      Credit
Jan. 31 Finished Goods       $795,200
Materials
Account Titles                            Debit       Credit
Jan. 1 Beginning balance         $17,000
Jan. 2 Accounts payable       500,000
Jan. 31 Work-in-Process - Spinning           $275,000
Jan. 31 Work-in-Process - Spinning               46,000
Jan. 31 Factory Overhead - Tufting               39,500
Jan. 31 Factory Overhead - Tufting              110,000
Jan. 31 Ending balance                                  46,500
Factory Overhead - Spinning
Account Titles                                    Debit      Credit
Jan. 31 Materials - Spinning             46,000
Jan. 31 Payroll - Spinning                  18,500
Jan. 31 Depreciation - Spinning       12,500
Jan. 31 Factory insurance-Spinning 2,000
Jan. 31 Work in Process                                  80,000
Jan. 31 Balance                                  1,000
Factory Overhead - Tufting
Account Titles                                    Debit      Credit
Jan. 31 Materials - Tufting                39,500
Jan. 31 Payroll - Tufting                      9,000
Jan. 31 Depreciation - Tufting           8,500
Jan. 31 Factory insurance- Tufting    1,000
Jan. 31 Work in Process                                   55,000
Jan. 31 Balance                                                   3,000