E15-11 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 Manufacturing Overhead

Service Contracts in Process 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 T-account.)