Entries for process cost system Instructions Final Questions Chart of Accounts Journal Instructions transferred to the Tufting Department, where carpet backing 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 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. Materials purchased on account, $500,000 Materials requisitioned for use: 2 Fiber Spinning Department, $275,000 Carpet backing-Tufting Department, $110,000 Indirect materials Spinning Department, $46,000 Indirect materials-Tufting Department, $39,500 Labor used: 31 Direct labor-Spinning Department, $185,000 Direct labor-Tufting Department, $98.000 Spinnina Denartment $18 500 Indirect labor

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter3: Process Cost Systems
Section: Chapter Questions
Problem 1PA: Entries for process cost system Port Ormond Carpet Company manufactures carpets. Fiber is placed in...
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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:
     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
Entries for process cost system
Instructions
Final Questions
Chart of Accounts
Journal
Instructions
transferred to the Tufting Department, where carpet backing
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 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.
Materials purchased on account, $500,000
Materials requisitioned for use:
2
Fiber Spinning Department, $275,000
Carpet backing-Tufting Department, $110,000
Indirect materials Spinning Department, $46,000
Indirect materials-Tufting Department, $39,500
Labor used:
31
Direct labor-Spinning Department, $185,000
Direct labor-Tufting Department, $98.000
Spinnina Denartment $18 500
Indirect labor
Transcribed Image Text:Entries for process cost system Instructions Final Questions Chart of Accounts Journal Instructions transferred to the Tufting Department, where carpet backing 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 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. Materials purchased on account, $500,000 Materials requisitioned for use: 2 Fiber Spinning Department, $275,000 Carpet backing-Tufting Department, $110,000 Indirect materials Spinning Department, $46,000 Indirect materials-Tufting Department, $39,500 Labor used: 31 Direct labor-Spinning Department, $185,000 Direct labor-Tufting Department, $98.000 Spinnina Denartment $18 500 Indirect labor
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