The law firm of Furlan and Benson accumulates costs associated with individual c
ID: 2427002 • Letter: T
Question
The law firm of Furlan and Benson accumulates costs associated with individual cases, using a job order cost system
A type of cost accounting system that provides for a separate record of the cost of each particular quantity of product that passes through the factory.
. The following transactions occurred during July:
Required:
none
X
Chart of Accounts
none
X
Journal
A. Provide the journal entries for each of these transactions. Refer to the Chart of Accounts for exact wording of account titles.
PAGE 10
JOURNAL
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Solution
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Final Question
B. How much office overhead is over- or underapplied?
selector 1
Overapplied
Underapplied
Points:
C. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.
How much office overhead is over- or underapplied?
selector 1
Overapplied
Underapplied
Points:
C. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.
Jul. 3 Charged 175 hours of professional (lawyer) time to the Obsidian Co. breech of contract suit to prepare for the trial, at a rate of $150 per hour. 10 Reimbursed travel costs to employees for depositions related to the Obsidian case, $12,500. 14 Charged 260 hours of professional time for the Obsidian trial at a rate of $185 per hour. 18 Received invoice from consultants Wadsley and Harden for $30,000 for expert testimony related to the Obsidian trial. 27 Applied office overhead at a rate of $62 per professional hour charged to the Obsidian case. 31 Paid administrative and support salaries of $28,500 for the month. 31 Used office supplies for the month, $4,000. 31 Paid professional salaries of $74,350 for the month. 31 Billed Obsidian $172,500 for successful defense of the case.Explanation / Answer
Furlan & Benson Journal entries Date Account Title Dr $ Cr $ Jul 3. WIP -Obsidian Co Trial Job order 26,250.00 Salaries payable 26,250.00 (175 hrs prof fees charged ) Jul 10. WIP -Obsidian Co Trial Job order 12,500.00 Cash 12,500.00 (travel expense charged) Jul14. WIP -Obsidian Co Trial Job order 48,100.00 Salaries payable 48,100.00 (260 hrs prof fees charged) Jul18. WIP -Obsidian Co Trial Job order 30,000.00 Consultant Fees Payable 30,000.00 ( Consultant fees charged to job) Jul27. WIP -Obsidian Co Trial Job order 26,970.00 Office Overhead a/c 26,970.00 ( OH applied to job for 435 hrs @$62) Jul 31. Office Overhead a/c 28,500.00 Cash 28,500.00 ( Paid salaries of office staff) Jul 31. Office Overhead a/c 4,000.00 Office Supplies inventory 4,000.00 Jul 31. Salaries payable 74,350.00 Cash 74,350.00 Jul 31. Fees Earned 172,500.00 Accounts Receivable 172,500.00 ( billed Rucker for the job ) Office Overhead Incurred Secretarial & Admin salary 28,500.00 Office supplies 4,000.00 Total office overhead incurred 32,500.00 Office Overhead applied 26,970.00 Office Overhead under applied 5,530.00 Obsidian Detailed cost Amt $ Professional fees 74,350.00 Travel cost 12,500.00 Consultant fees 30,000.00 Office overhead applied 26,970.00 Add : Underapplied office overhead 5,530.00 Cost of services 149,350.00 Revenue from Service 172,500.00 Gross Profit from Obsidian Case 23,150.00
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.