Chapter 2, Problem 2.11E

The following are the job cost related accounts for the law firm of Colaw Associates and their manufacturing equivalents:

Law Firm Accounts	Manufacturing Firm Accounts
Supplies	Raw Materials
Salaries and Wages Payable	Factory Wages Payable
Operating Overhead Service Contracts in Process	Manufacturing Overhead Work in Process
Cost of Completed Service Contracts	Cost of Goods Sold

  Cost data for the month of March follow.

 1. Purchased supplies on account $ 1,800.

 2. Issued supplies $ 1,200 (60% direct and 40% indirect).

 3. Assigned labor costs based on time cards for the month which indicated labor costs of $70,000 (80% direct and 20% indirect).

 4. Operating overhead costs incurred for cash totaled $40,000.

 5. Operating overhead is applied at a rate of 90% of direct labor cost.

 6. Work completed totaled $75,000.

  Instructions

 (a) Journalize the transactions for March. (Omit explanations.)

 (b) Determine the balance of the Service Contracts in Process account. (Use a T-account.)