Job Order Cost Accounting for a Service Company

The law firm of Furlan and Benson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during July:

July 3.	Charged 630 hours of professional (lawyer) time to the Obsidian Co. breech of contract suit to prepare for the trial, at a rate of $210 per hour.
10.	Reimbursed travel costs to employees for depositions related to the Obsidian case, $26,700.
14.	Charged 270 hours of professional time for the Obsidian trial at a rate of $290 per hour.
18.	Received invoice from consultants Wadsley and Harden for $63,400 for expert testimony related to the Obsidian trial.
27.	Applied office overhead at a rate of $40 per professional hour charged to the Obsidian case.
31.	Paid administrative and support salaries of $25,600 for the month.
31.	Used office supplies for the month, $8,600.
31.	Paid professional salaries of $176,400 for the month.
31.	Billed Obsidian $385,100 for successful defense of the case.

a. Provide the journal entries for each of these transactions. If an amount box does not require an entry, leave it blank.

July 3	Work in Process	fill in the blank	fill in the blank
	Salaries Payable	fill in the blank	fill in the blank
July 10	Work in Process	fill in the blank	fill in the blank
	Cash	fill in the blank	fill in the blank
July 14	Work in Process	fill in the blank	fill in the blank
	Salaries Payable	fill in the blank	fill in the blank
July 18	Work in Process	fill in the blank	fill in the blank
	Consultant Fees Payable	fill in the blank	fill in the blank
July 27	Work in Process	fill in the blank	fill in the blank
	Office Overhead	fill in the blank	fill in the blank
July 31 Admin. sal.	Office Overhead	fill in the blank	fill in the blank
	Cash	fill in the blank	fill in the blank
July 31 Supplies	Office Overhead	fill in the blank	fill in the blank
	Supplies	fill in the blank	fill in the blank
July 31 Prof. sal.	Salaries Payable	fill in the blank	fill in the blank
	Cash	fill in the blank	fill in the blank
July 31 Billed	Accounts Receivable	fill in the blank	fill in the blank
	Fees Earned	fill in the blank	fill in the blank
July 31 Cost	Cost of Services	fill in the blank	fill in the blank
	Work in Process	fill in the blank	fill in the blank

Feedback

a. Record the direct costs in Work in Process. Apply the overhead based on professional hours. Record actual overhead in the Office Overhead account. For cases completed, move the costs from Work in Process to Cost of Services.

b. How much office overhead is over- or underapplied? Enter your answer as a positive number. $fill in the blank ab9642085f85fc0_1 Overapplied

c. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services. $fill in the blank