Entries for process.cost system Chart of Journal Final Questions Port Ormond Car
ID: 2334963 • Letter: E
Question
Entries for process.cost system Chart of Journal Final Questions Port Ormond Carpet Company manufactures carpets. Feer is placed process inthe Spir in Department, where·is spun nto yam. The output of the inning Department is tran tened to the Tuing 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 tollowing inventonies 562,000 Finished Goods Work in Process-Spinning Department 35,000 Work in Process-Tuing Departmen Materials 28,500 17,000 Departmental ounes are maintained for factory overhead, and both have zeno balances on January 1. Manufacturing operations for January are summarized as toliows Jan. 1 Manerials purchased on account, $500,000 2 Manerials requisitioned for use Fiber-Spinning Department, $275,000 Carpet backing-Tulting Deparment, $110,000 Indirect materials-Spinning Department, $46,000Explanation / Answer
Solution:
Ending material inventory on January 31 = Beginning material inventory + Purchases of material - Direct and indirect material used in production
= $17,000 + $500,000 - ($275,000 + $110,000 + $46,000 + $39,500) = $46,500 Debit
Ending finished goods inventory on January 31 = Beginning finished goods inventory + Cost of goods manufactured - cost of goods sold
= $62,000 + $807,200 - $795,200 = $74,000 debit
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