Question

Exercise 15-11 a-b (Part Level Submission) The following are the job cost related accounts for the law firm of Sheridan Associates and their manufacturing equivalents: Law Firm Accounts Supplies Salaries and Wages Payable Operating Overhead Service Contracts in Process Cost of Completed Service Contracts Manufacturing Firm Accounts Raw Materials Factory Wages Payable Manufacturing Overhead Work in Process Cost of Goods Sold Cost data for the month of March follow. 1. 2. 3. Purchased supplies on account $3,400. Issued supplies $1,400 (60% direct and 40% indirect). Assigned labor costs based on time cards for the month which indicated labor costs of $79,600 (80% direct and 20% indirect). Operating overhead costs incurred for cash totaled $41,700. Operating overhead is applied at a rate of 90% of direct labor cost. Work completed totaled $85,300. 4. 5. 6. (a) Journalize the transactions for March. (Credit account titles are automatically indented when amount is entered. Do not indent manually.) No. Account Titles and Explanation Debit Credit 1. 2. 3. 4. 5. 6. Click if you would like to Show Work for this question: Open Show Work

Answer 1

Credit Debit $ 3,400 No. Account Titles and Explanation 1 Supplies Accounts payable (To record the purchase of supplies on account) $ 3,400 840 $ $ 560 2 Service contracts in process ($1,400*60%) Operating overhead ($1,400*40%) Supplies (To record the issue of supplies) $ 1,400 $ 63,680 $ 15,920 3 Service contracts in process ($79,600*80%) Operating overhead ($79,600*20%) Salaries and wages payable (To record the labor costs) $ 79,600 $ 41,700 4 Operating overhead Cash (To record the overhead incurred) $ 41,700 $ 57,312 5 Service contracts in process ($63,680*90%) Operating overhead (To record the overhead applied) $ 57,312 $ 85,300 6 Cost of completed service contracts Service contracts in process (To record the work completed) $ 85,300