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The law firm of Tilton and Henderson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during July:
The law firm of Tilton and Henderson accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during July:
July 3. | Charged 660 hours of professional (lawyer) time to the Rucker Co. breech of contract suit to prepare for the trial, at a rate of $220 per hour. |
10. | Reimbursed travel costs to employees for depositions related to the Rucker case, $14,800. |
14. | Charged 200 hours of professional time for the Rucker trial at a rate of $280 per hour. |
18. | Received invoice from consultants Wenzel and Lachgar for $76,100 for expert testimony related to the Rucker trial. |
27. | Applied office overhead at a rate of $55 per professional hour charged to the Rucker case. |
31. | Paid administrative and support salaries of $33,600 for the month. |
31. | Used office supplies for the month, $11,400. |
31. | Paid professional salaries of $166,000 for the month. |
31. | Billed Rucker $387,700 for successful defense of the case. |
a. Provide the journal entries for each of these transactions.
July 3 | |||
July 10 | |||
July 14 | |||
July 18 | |||
July 27 | |||
July 31 Admin. sal. | |||
July 31 Supplies | |||
July 31 Prof. sal. | |||
July 31 Billed | |||
July 31 Cost | |||
b. How much office overhead is over- or underapplied? Enter your answer as a positive number. $
c. Determine the gross profit on the Rucker case, assuming that over- or underapplied office overhead is closed monthly to cost of services. $
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