Living Decor 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 October 1, Living Decor Carpet Company had the following inventories:

Finished Goods ........... $56,900

Work in Process—Spinning Department . 7,900

Work in Process—Tufting Department . 21,400

Materials ............. 36,200

Departmental accounts are maintained for factory overhead, and both have zero balances on October 1.

Manufacturing operations for October are summarized as follows:

a. Materials purchased on account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $810,900

b. Materials requisitioned for use:

Fiber—Spinning Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $532,400

Carpet backing—Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201,800

Indirect materials—Spinning Department . . . . . . . . . . . . . . . . . . . . . . . . . . 50,700

Indirect materials—Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,800

c. Labor used:

Direct labor—Spinning Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . $224,100

Direct labor—Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178,900

Indirect labor—Spinning Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134,200

Indirect labor—Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,500

d. Depreciation charged on fixed assets:

Spinning Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $56,200

Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,000

e. Expired prepaid factory insurance:

Spinning Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $10,000

Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000

f. Applied factory overhead:

Spinning Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $244,600

Tufting Department . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173,200

g. Production costs transferred from Spinning Department to Tufting Department . $946,700

h. Production costs transferred from Tufting Department to Finished Goods. . $1,400,500

i. Cost of goods sold during the period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,395,800

Instructions

1. Journalize the entries to record the operations, identifying each entry by letter.

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

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