Instructions 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: Vault Bank Take Off Airlines August 1 Balances $270,000 80,000 Sleepy Tired Hotels 210,000 115,000 $675,000 Tastee Beverages Total During August, The Fly Company incurred the following direct labor and media purchase cost related to preparing advertising for each of the four accounts: Direct Labor Media Purchases. Vault Bank $190,000 $710,000 Take Off Airlines 85,000 625,000 Direct Labor Media Purchases Vault Bank $190,000 $710,000 Take Off Airlines 85,000 625,000 Sleepy Tired Hotels 372,000 455,000 Tastee Beverages 421,000 340,000 Total $1,068,000 $2,130,000 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. Required: 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 Chart of Accounts CHART OF ACCOUNTS The Fly Company General Ledger ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable REVENUE 410 Fees Earned 610 Interest Revenue EXPENSES 132 Work in Process 510 Cost of Services 133 Agency Overhead 520 Salaries Expense 141 Supplies 142 Prepaid Insurance 143 Prepaid Expenses 191 Office Equipment 192 Accumulated Depreciation-Office Equipment LIABILITIES 531 Selling Expenses 532 Insurance Expense 533 Utilities Expense 534 Office Supplies Expense 540 Administrative Expenses 560 Depreciation Expense-Office Equipment 590 Miscellaneous Expense t of Accounts 191 Office Equipment 192 Accumulated Depreciation-Office Equipment 534 Office Supplies Expense 540 Administrative Expenses 560 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest Expense LIABILITIES 210 Accounts Payable 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 DATE DESCRIPTION JOURNAL PAGE 10 ACCOUNTING EQUATION POST REF DEBIT CREDIT ASSETS LIABILITIES EQUITY 2 3 DATE DESCRIPTION JOURNAL PAGE 10 ACCOUNTING EQUATION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY