Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ch19 7 The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedch19 7

The Fly Company provides advertising services for clients across the nation. The Fly Company is presently working on four projects, each for a different client. The Fly Company accumulates costs for each account (client) on the basis of both direct costs and allocated indirect costs. The direct costs include the charged time of professional personnel and media purchases (air time and ad space). Overhead is allocated to each project as a percentage of media purchases. The predetermined overhead rate is 65% of media purchases. On August 1, the four advertising projects had the following accumulated costs: August 1 Balances Vault Bank $269,200 Take Off Airlines 76,700 Sleepy Tired Hotels 218,200 Tastee Beverages 124,000 Total $688,100 During August, The Fly Company incurred the following direct labor and media purchase costs related to preparing advertising for each of the four accounts: Direct Labor Media Purchases Vault Bank $199,300 $706,900 Take Off Airlines 76,200 623,800 Sleepy Tired Hotels 366,100 459,100 Tastee Beverages 422,000 340,000 Total $1,063,600 $2,129,800 At the end of August, both the Vault Bank and Take Off Airlines campaigns were completed. The costs of completed campaigns are debited to the cost of services account. CHART OF ACCOUNTS The Fly Company General Ledger ASSETS REVENUE 110 Cash 410 Fees Earned 121 Accounts Receivable 610 Interest Revenue 125 Notes Receivable 126 Interest Receivable EXPENSES 132 Work in Process 510 Cost of Services 133 Agency Overhead 520 Salaries Expense 141 Supplies 531 Selling Expenses 142 Prepaid Insurance 532 Insurance Expense 143 Prepaid Expenses 533 Utilities Expense 191 Office Equipment 534 Office Supplies Expense 192 Accumulated Depreciation Office Equipment 540 Administrative Expenses 560 Depreciation Expense-Office Equipment LIABILITIES 590 Miscellaneous Expense 210 Accounts Payable 710 Interest Expense 221 Utilities Payable 231 Notes Payable 236 Interest Payable 241 Lease Payable 251 Salaries Payable 252 Consultant Fees Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends Journalize the four summary entries on August 31 to record each of the following for the month. Refer to the chart of accounts for the exact wording of the account titles. CNOW journals do not use lines for journal explanations. Every line on a journal page is used for debit or credit entries. CNOW journals will automatically indent a credit entry when a credit amount is entered. a. Direct labor costs b. Media purchases c. Overhead applied d. Completion of Vault Bank and Take Off Airlines campaigns PAGE 10 JOURNAL ACCOUNTING EQUATION DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1 2 3 4 5 6 7 8

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Connect For Data Analytics For Accounting

Authors: Author

2nd Edition

1264152000, 9781264152001

More Books

Students also viewed these Accounting questions

Question

Show that PIY > y} dy PIY y) dy = xfr(x) dx

Answered: 1 week ago

Question

How have our views of gender changed in recent history?

Answered: 1 week ago