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strojnjashka [21]
3 years ago
12

Port Ormond Carpet Company manufactures carpets. Fiber is placed in process in the Spinning Department, where it is spun into ya

rn. 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 $62,000
Work in Process-Spinning Department 35,000
Work in Process-Tufting Department 28,500
Materials 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
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
31 Production costs transferred from Tufting Department to Finished Goods, $807,200
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.
Business
1 answer:
sammy [17]3 years ago
7 0

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

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