Question

The law firm of Tilton and Henderson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during July:

July 3.	Charged 660 hours of professional (lawyer) time to the Rucker Co. breech of contract suit to prepare for the trial, at a rate of $220 per hour.
10.	Reimbursed travel costs to employees for depositions related to the Rucker case, $14,800.
14.	Charged 200 hours of professional time for the Rucker trial at a rate of $280 per hour.
18.	Received invoice from consultants Wenzel and Lachgar for $76,100 for expert testimony related to the Rucker trial.
27.	Applied office overhead at a rate of $55 per professional hour charged to the Rucker case.
31.	Paid administrative and support salaries of $33,600 for the month.
31.	Used office supplies for the month, $11,400.
31.	Paid professional salaries of $166,000 for the month.
31.	Billed Rucker $387,700 for successful defense of the case.

a. Provide the journal entries for each of these transactions.

July 3
July 10
July 14
July 18
July 27
July 31 Admin. sal.
July 31 Supplies
July 31 Prof. sal.
July 31 Billed
July 31 Cost

b. How much office overhead is over- or underapplied? Enter your answer as a positive number.
$  

c. Determine the gross profit on the Rucker case, assuming that over- or underapplied office overhead is closed monthly to cost of services.
$

Answer 1

solution Date Particulare Dett Gredit July 3 . 145200 145200 July 10 I work in process (660 hry 220] Salaries payable work in process cash work in process (200x280] Salaries payable 14800 14800 July 14 58000 56000 July 18 I 76100 26100 July 22 - work in process Consultant fees payable work in process [620 + 200 X 55 office overhead 45100 45100 July 31 33600 office overhead Cash 33600 July 31 11400 office overhead supplees 11400 July 31 payable 166000 Salarles Cash 166000 July 31 387700 Accounts Receivable fees earned 3877700 July 31 337200 Cost of work services in process 337200 145200 + 14800 + 56000 + 76100 + 45100 = 337200

45100 45000 office overhead appled office overhead Incurred [ 33600 + 11400] overapplied overhead Too 387700 337100 fees earned cost of Services (334200 - 100] Gross profft 50600 The oner = or to underappleed office overhead is closed Cost of services monthly.