Job Order Cost Accounting for a Service Company The law firm of Furlan and Benson accumulates...

Transcribed Image Text:

Job Order Cost Accounting for a Service Company The law firm of Furlan and Benson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during July: July 3. Charged 610 hours of professional (lawyer) time at a rate of $180 per hour to the Obsidian Co. breech of contract suit to prepare for the trial 10. Reimbursed travel costs to employees for depositions related to the Obsidian case, $14,200 14. Charged 200 hours of professional time for the Obsidian trial at a rate of $250 per hour 18. Received invoice from consultants Wadsley and Harden for $47,800 for expert testimony related to the Obsidian trial 27. Applied office overhead at a rate of $40 per professional hour charged to the Obsidian case 31. Paid administrative and support salaries of $23,000 for the month 31. Used office supplies for the month, $7,800 31. Paid professional salaries of $183,000 for the month 31. Billed Obsidian $290,500 for successful defense of the case a. Provide the journal entries for each of these transactions. If an amount box does not require an entry, leave it blank. July 3 Work in Process 109,800 Salaries Payable 109,800 July 10 Work in Process Cash 14,200 14,200 July 14 Work in Process 50,000 Salaries Payable 50,000 July 18 Work in Process 47,800 Consultant Fees Payable 47,800 July 27 Work in Process Office Overhead 32,400 32,400 July 31 Admin. sal. Office Overhead Cash July 31 Supplies July 31 Prof. sal. Office Overhead Supplies Salaries Payable Cash July 31 Billed Accounts Receivable Fees Earned July 31 Cost Cost of Services Work in Process b. How much office overhead is over- or underapplied? Enter your answer as a positive number. c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services. Job Order Cost Accounting for a Service Company The law firm of Furlan and Benson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during July: July 3. Charged 610 hours of professional (lawyer) time at a rate of $180 per hour to the Obsidian Co. breech of contract suit to prepare for the trial 10. Reimbursed travel costs to employees for depositions related to the Obsidian case, $14,200 14. Charged 200 hours of professional time for the Obsidian trial at a rate of $250 per hour 18. Received invoice from consultants Wadsley and Harden for $47,800 for expert testimony related to the Obsidian trial 27. Applied office overhead at a rate of $40 per professional hour charged to the Obsidian case 31. Paid administrative and support salaries of $23,000 for the month 31. Used office supplies for the month, $7,800 31. Paid professional salaries of $183,000 for the month 31. Billed Obsidian $290,500 for successful defense of the case a. Provide the journal entries for each of these transactions. If an amount box does not require an entry, leave it blank. July 3 Work in Process 109,800 Salaries Payable 109,800 July 10 Work in Process Cash 14,200 14,200 July 14 Work in Process 50,000 Salaries Payable 50,000 July 18 Work in Process 47,800 Consultant Fees Payable 47,800 July 27 Work in Process Office Overhead 32,400 32,400 July 31 Admin. sal. Office Overhead Cash July 31 Supplies July 31 Prof. sal. Office Overhead Supplies Salaries Payable Cash July 31 Billed Accounts Receivable Fees Earned July 31 Cost Cost of Services Work in Process b. How much office overhead is over- or underapplied? Enter your answer as a positive number. c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.