Farnsworth Executive Coaching (FEC) offers services to firms in advising executives on improving productivity and leadership. For August, FEC worked 660 hours for Grace Corporation and 390 hours for Temple Construction. In addition, FEC had small engagements with various clients totaling 125 hours. FEC bills clients at the rate of $600 per hour; labor cost for its professional staff is $275 per hour. Overhead costs in August totaled $73,200. Overhead is applied to clients at $65 per labor-hour. In addition, FEC had $179,250 in marketing and administrative costs. All transactions are on account. All services were billed.

Transaction	Description
(a)	Record labor cost
(b)	Record applied service overhead
(c)	Record cost of services billed
(d)	Record actual Service overhead

Required:

Show labor and overhead cost flows through T-accounts.

Prepare an income statement for the company for August.

\begin{tabular}{|c|c|c|c|c|c|c|c|} \hline \multicolumn{4}{|c|}{ Cost of Services Billed } & \multicolumn{4}{|c|}{ Service Overhead Control } \\ \hline \multicolumn{2}{|l|}{ Debit } & \multicolumn{2}{|c|}{ Credit } & \multicolumn{2}{|l|}{ Debit } & \multicolumn{2}{|c|}{ Credit } \\ \hline Beginning balance & & & & Beginning balance & & & \\ \hline 2 & 399,500 & & & (d) & 73,200 & & \\ \hline & & & & & & & \\ \hline Ending balance & 399,500 & & & Ending balance & 73,200 & & \\ \hline \multicolumn{4}{|c|}{ Applied Service Overhead } & & & & \\ \hline \multicolumn{2}{|l|}{ Debit } & \multicolumn{2}{|c|}{ Credit } & & & & \\ \hline \multicolumn{4}{|l|}{ Beginning balance } & & & & \\ \hline & & 76,375 & & & & & \\ \hline Ending balance & & 76,375 & & & & & \\ \hline \end{tabular}