Entries for process cost system

Instructions

Chart of Accounts

Journal

Final Questions

Instructions

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	$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:
		FiberSpinning Department, $275,000
		Carpet backingTufting Department, $110,000
		Indirect materialsSpinning Department, $46,000
		Indirect materialsTufting Department, $39,500
	31	Labor used:
		Direct laborSpinning Department, $185,000
		Direct laborTufting Department, $98,000
		Indirect laborSpinning Department, $18,500
		Indirect laborTufting 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.

Chart of 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	REVENUE 410 Sales 610 Interest Revenue EXPENSES 510 Cost of Goods Sold 520 Wages Expense 531 Selling Expense 532 Insurance Expense 533 Utilities Expense 534 Supplies Expense 540 Administrative Expense 561 Depreciation Expense-Factory 590 Miscellaneous Expense 710 Interest Expense

Journal

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.

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JOURNAL

ACCOUNTING EQUATION

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Final Questions

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

Materials
Work in Process:
Spinning Department
Tufting Department
Finished Goods

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

Factory Overhead:
Spinning Department
Tufting Department