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 490 hours of professional (lawyer) time at a rate of $230 per hour to the Obsidian Co. breech of contract suit to prepare for the trial
10.	Reimbursed travel costs to employees for depositions related to the Obsidian case, $24,300
14.	Charged 290 hours of professional time for the Obsidian trial at a rate of $270 per hour
18.	Received invoice from consultants Wadsley and Harden for $51,300 for expert testimony related to the Obsidian trial
27.	Applied office overhead at a rate of $55 per professional hour charged to the Obsidian case
31.	Paid administrative and support salaries of $30,500 for the month
31.	Used office supplies for the month, $10,300
31.	Paid professional salaries of $171,900 for the month
31.	Billed Obsidian $353,500 for successful defense of the case

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

July 3	CashCost of ServicesOffice OverheadSalaries PayableWork in ProcessWork in Process	Work in Process	Work in Process
	CashCost of ServicesOffice OverheadSalaries PayableWork in ProcessSalaries Payable	Salaries Payable	Salaries Payable
July 10	CashCost of ServicesSalaries PayableOffice OverheadWork in ProcessWork in Process	Work in Process	Work in Process
	CashCost of ServicesSalaries PayableOffice OverheadWork in ProcessCash	Cash	Cash
July 14	Accounts ReceivableCost of ServicesOffice OverheadSalaries PayableWork in ProcessWork in Process	Work in Process	Work in Process
	Accounts ReceivableCost of ServicesOffice OverheadSalaries PayableWork in ProcessSalaries Payable	Salaries Payable	Salaries Payable
July 18	CashConsultant Fees PayableCost of ServicesOffice OverheadWork in ProcessWork in Process	Work in Process	Work in Process
	CashConsultant Fees PayableCost of ServicesOffice OverheadWork in ProcessConsultant Fees Payable	Consultant Fees Payable	Consultant Fees Payable
July 27	CashCost of ServicesOffice OverheadSalaries PayableWork in ProcessWork in Process	Work in Process	Work in Process
	CashCost of ServicesOffice OverheadSalaries PayableWork in ProcessOffice Overhead	Office Overhead	Office Overhead
July 31 Admin. sal.	Accounts ReceivableCashCost of ServicesOffice OverheadWork in ProcessOffice Overhead	Office Overhead	Office Overhead
	Accounts ReceivableCashCost of ServicesOffice OverheadWork in ProcessCash	Cash	Cash
July 31 Supplies	Accounts ReceivableCost of ServicesOffice OverheadSuppliesWork in ProcessOffice Overhead	Office Overhead	Office Overhead
	Accounts ReceivableCost of ServicesOffice OverheadSuppliesWork in ProcessSupplies	Supplies	Supplies
July 31 Prof. sal.	Accounts ReceivbleCashFees EarnedSalaries PayableWork in ProcessSalaries Payable	Salaries Payable	Salaries Payable
	Accounts ReceivbleCashFees EarnedSalaries PayableWork in ProcessCash	Cash	Cash
July 31 Billed	Accounts ReceivableCashCost of ServicesFees EarnedOffice OverheadAccounts Receivable	Accounts Receivable	Accounts Receivable
	Accounts ReceivableCashCost of ServicesFees EarnedOffice OverheadFees Earned	Fees Earned	Fees Earned
July 31 Cost	Accounts ReceivableCashCost of ServicesSalaries PayableWork in ProcessCost of Services	Cost of Services	Cost of Services
	Accounts ReceivableCashCost of ServicesSalaries PayableWork in ProcessWork in Process	Work in Process	Work in Process

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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.

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b. How much office overhead is over- or underapplied? Enter your answer as a positive number. $fill in the blank ad8ac5014fb1fae_1

OverappliedUnderappliedOverapplied

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 ad8ac5014fb1fae_3

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