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 |
$6,500 |
| Work in Process-Spinning Department |
1,200 |
| Work in Process-Tufting Department |
2,300 |
| Materials |
4,100 |
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, $84,700 |
|
2 |
Materials requisitioned for use: |
|
|
Fiber-Spinning Department, $42,800 |
|
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Carpet backing-Tufting Department, $34,000 |
|
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Indirect materials-Spinning Department, $3,400 |
|
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Indirect materials-Tufting Department, $2,700 |
|
31 |
Labor used: |
|
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Direct labor-Spinning Department, $26,600 |
|
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Direct labor-Tufting Department, $17,600 |
|
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Indirect labor-Spinning Department, $11,900 |
|
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Indirect labor-Tufting Department, $11,800 |
|
31 |
Depreciation charged on fixed assets: |
|
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Spinning Department, $5,400 |
|
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Tufting Department, $4,000 |
|
31 |
Expired prepaid factory insurance: |
|
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Spinning Department, $1,100 |
|
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Tufting Department, $800 |
|
31 |
Applied factory overhead: |
|
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Spinning Department, $22,200 |
|
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Tufting Department, $18,950 |
|
31 |
Production costs transferred from Spinning Department to
Tufting Department, $89,500 |
|
31 |
Production costs transferred from Tufting Department to
Finished Goods, $151,400 |
|
31 |
Cost of goods sold during the period, $154,200 |
|
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 the exact wording of the account
titles. CNOW journals do not use lines for spaces or journal
explanations. Every line on a journal page is used for debit or
credit entries. Do not add explanations or skip a line between
journal entries. CNOW journals will automatically indent a credit
entry when a credit amount is entered. |
| 2. |
Compute the January 31 balances of the inventory
accounts.* |
| 3. |
Compute the January 31 balances of the factory overhead
accounts.* |
|
*Enter your amounts in positive value. |
| 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. Refer
to the chart of accounts for the exact wording of the account
titles. CNOW journals do not use lines for spaces or journal
explanations. Every line on a journal page is used for debit or
credit entries. Do not add explanations or skip a line between
journal entries. CNOW journals will automatically indent a credit
entry when a credit amount is entered.
PAGE 10
JOURNAL
ACCOUNTING EQUATION
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DATE |
DESCRIPTION |
POST. REF. |
DEBIT |
CREDIT |
ASSETS |
LIABILITIES |
EQUITY |
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2. Compute the January 31 balances of the inventory accounts.
Enter your amounts in positive value.
| Materials |
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| Work in Process: |
|
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| • Spinning Department |
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| • Tufting Department |
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| Finished Goods |
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3. Compute the January 31 balances of the factory overhead
accounts. Enter your amounts in positive value.
| Factory Overhead: |
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| • Spinning Department |
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| • Tufting Department |
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