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 420 hours of professional (lawyer) time to the Obsidian 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 Obsidian case, $22,700. 14. Charged 260 hours of professional time for the Obsidian trial at a rate of $270 per hour. 18. Received invoice from consultants Wadsley and Harden for $60,400 for expert testimony related to the Obsidian trial. 27. Applied office overhead at a rate of $65 per professional hour charged to the Obsidian case. 31. Paid administrative and support salaries of $31,400 for the month. 31. Used office supplies for the month, $10,600. 31. Paid professional salaries of $173,000 for the month. 31. Billed Obsidian $330,900 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               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 Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services. $

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Chapter1: Financial Statements And Business Decisions
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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 420 hours of professional (lawyer) time to the Obsidian 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 Obsidian case, $22,700.
14. Charged 260 hours of professional time for the Obsidian trial at a rate of $270 per hour.
18. Received invoice from consultants Wadsley and Harden for $60,400 for expert testimony related to the Obsidian trial.
27. Applied office overhead at a rate of $65 per professional hour charged to the Obsidian case.
31. Paid administrative and support salaries of $31,400 for the month.
31. Used office supplies for the month, $10,600.
31. Paid professional salaries of $173,000 for the month.
31. Billed Obsidian $330,900 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      
       
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 Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.
$

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