Question

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 410 hours of professional (lawyer) time to the Obsidian Co. breech of contract suit to prepare for the trial, at a rate of $241 10. Reimbursed travel costs to employees for depositions related to the Obsidian case, $23,000. 14. Charged 260 hours of professional time for the Obsidian trial at a rate of $260 per hour. 18. Received invoice from consultants Wadsley and Harden for $64,400 for expert testimony related to the Obsidian trial. 27. Applied office overhead at a rate of $45 per professional hour charged to the Obsidian case. 31. Paid administrative and support salaries of $21,400 for the month. 31. Used office supplies for the month, $7,200. 31. Paid professional salaries of $190,800 for the month. 31. Billed Obsidian $324,300 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 98,400 Salaries Payable 98,400 ✓ July 10 Work in Process 23,000 Cash 23,000 July 14 Work in Process 67,600

Answer 1

Date	General Journal				Debit	Credit
3-Jul	Work in process				98400
	Salaries payable					98,400
10-Jul	Work in process				23,000
	cash					23,000
14-Jul	Work in process				67600
	Salaries payable					67,600
18-Jul	work in process				64,400
	Consultant fees payable					64,400
27-Jul	Work in process				30150
	office overhead					30,150
31-Jul	office overhead				21,400
	Cash					21,400
31-Jul	office overhead				7,200
	Supplies					7,200
31-Jul	Salaries payable				190,800
	cash					190,800
31-Jul	Accounts receivable				324,300
	Fees earned					324,300
31-Jul	Cost of services				283,550
	work in process					249,000
b)	office overhead over applied				1,550
c)	Gross profit				42,300
	(324300 - (283550-1550)