Question

CH 16 EXERCISES 3,4,8,10,14.15 eBook Calculator July 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. a. Provide the journal entries for each of these transactions. July 3 July 10 1 July 14 1 July 18 1 July 27 1 July 31 Admin. sal. July 31 Admin. sal. = 1 July 31 Supplies 1 July 31 Prof. sal. 1 July 31 Billed 1 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 Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.

Answer 1

Date	General Journal				Debit	Credit
3-Jul	Work in process				26250
	Salaries payable					26,250
10-Jul	Work in process				12,500
	cash					12,500
14-Jul	Work in process				48100
	Salaries payable					48,100
18-Jul	work in process				30,000
	Consultant fees payable					30,000
27-Jul	Work in process				26970
	office overhead					26,970
31-Jul	office overhead				28,500
	Cash					28,500
31-Jul	office overhead				4,000
	Supplies					4,000
31-Jul	Salaries payable				74,350
	cash					74,350
31-Jul	Accounts receivable				172,500
	Fees earned					172,500
31-Jul	Cost of services				143,820
	work in process					249,000
b)	office overhead under applied				5,530
	(28500+4000)-26970
c)	Gross profit				23,150
	(172500 - (143820+5530)