The law firm of Furlan and Benson accumulates costs associatedwith individual cases, using a job order cost system. The followingtransactions occurred during July:
| July 3. | Charged 420 hours of professional (lawyer) time to the ObsidianCo. breech of contract suit to prepare for the trial, at a rate of$150 per hour. |
| 10. | Reimbursed travel costs to employees for depositions related tothe Obsidian case, $18,500. |
| 14. | Charged 310 hours of professional time for the Obsidian trialat a rate of $260 per hour. |
| 18. | Received invoice from consultants Wadsley and Harden for$77,900 for expert testimony related to the Obsidian trial. |
| 27. | Applied office overhead at a rate of $70 per professional hourcharged to the Obsidian case. |
| 31. | Paid administrative and support salaries of $36,300 for themonth. |
| 31. | Used office supplies for the month, $12,300. |
| 31. | Paid professional salaries of $189,600 for the month. |
| 31. | Billed Obsidian $331,900 for successful defense of thecase. |
a. Provide the journal entries for each ofthese transactions. If an amount box does not require an entry,leave it blank.
| July 3 | Work in Process | | |
| Salaries Payable | | |
| July 10 | Work in Process | | |
| Cash | | |
| July 14 | Work in Process | | |
| Salaries Payable | | |
| July 18 | Work in Process | | |
| Consultant Fees Payable | | |
| July 27 | Work in Process | | |
| Office Overhead | | |
| July 31 Admin. sal. | Office Overhead | | |
| Cash | | |
| July 31 Supplies | Office Overhead | | |
| Supplies | | |
| July 31 Prof. sal. | Salaries Payable | | |
| Cash | | |
| July 31 Billed | Accounts Receivable | | |
| Fees Earned | | |
| July 31 Cost | Cost of Services | | |
| Work in Process | | |
b. How much office overhead is over- orunderapplied? Enter your answer as a positive number.
$ Underapplied
c. Determine the gross profit on the Obsidiancase, assuming that over- or underapplied office overhead is closedmonthly to cost of services.
$
