Answered: The law firm of Furlan and Benson…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Job Order Cost Accounting for a Service Company

See attached Images for Part A!!!

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 630 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, $19,500.
14.	Charged 320 hours of professional time for the Obsidian trial at a rate of $260 per hour.
18.	Received invoice from consultants Wadsley and Harden for $51,000 for expert testimony related to the Obsidian trial.
27.	Applied office overhead at a rate of $40 per professional hour charged to the Obsidian case.
31.	Paid administrative and support salaries of $27,000 for the month.
31.	Used office supplies for the month, $9,100.
31.	Paid professional salaries of $164,600 for the month.
31.	Billed Obsidian $377,700 for successful defense of the case.

b. How much office overhead is over- or underapplied? Enter your answer as a positive number.
$________ & (Overapplied/Underapplied)

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

Chapter 16 Homework
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 630 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, $19,500.
14. Charged 320 hours of professional time for the Obsidian trial at a rate of $260 per hour.
18. Received invoice from consultants Wadsley and Harden for $51,000 for expert testimony related to the Obsidian trial.
27. Applied office overhead at a rate of $40 per professional hour charged to the Obsidian case.
31. Paid administrative and support salaries of $27,000 for the month.
31. Used office supplies for the month, $9,100.
31. Paid professional salaries of $164,600 for the month.
31. Billed Obsidian $377,700 for successful defense of the case.
July 10
>
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 14
July 18
Work in Process
Salaries Payable
Work in Process
Cash
Work in Process
eBook
Salaries Payable
Work in Process
X
X
X
X
Print Item
X
X

July 18
July 27
July 31 Supplies
July 31 Admin. sal. Office Overhead
Cash
July 31 Prof. sal.
July 31 Billed
Work in Process
July 31 Cost
Work in Process
Office Overhead
Office Overhead
Supplies
Salaries Payable
✓
Cash
Accounts Receivable
Fees Earned
Cost of Services
Work in Process
X
X
X
X
X
X
X
X
X
X
X
X
X

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