Shown below are the job cost related accounts for the law firm of Barnes, King,

Question

Shown below are the job cost related accounts for the law firm of Barnes, King, and Morton and their manufacturing equivalents: Law Firm Accounts Manufacturing Firm Accounts Supplies Raw Materials Salaries Payable Factory Wages Payable Operating Overhead Manufacturing Overhead Work in Process Work in Process Cost of Completed Work Cost of Goods Sold Cost data for the month of March follow. Purchased supplies on account $1,500. Issued supplies $1,200 (60% direct and 40% indirect). Time cards for the month indicated labor costs of $50,000 (80% direct and 20% indirect). Operating overhead costs incurred for cash totaled $40,000. Operating overhead is applied at a rate of 90% of direct attorney cost. Work completed totaled $70,000. 1) Journalize the transactions for March. (For multiple debit/credit entries, list amounts from largest to smallest e.g. 10, 5, 3, 2.) 2) Determine the balance of the Work in Process account. Use a T account. (List amounts in order of the transaction numbers above. If an amount should be blank, enter a zero. All boxes must be filled to be correct.) Work in Process

Explanation / Answer

1.Debit: Supplies 1500 Credit: Accounts payable 1500 2.Debit: Work in process 720 Debit: Operating overhead 480 Credit: Supplies 1200 3.Debit: Work in process 40,000 Debit: Operating Overhead 10,000 Credit salaries payable 50,000 4.Debit: operating overhead 40,000 Credit: Cash 40,000 5.Debit: Work in process 36,000 Credit: Operating overhead 36,000 6.Debit: Cost of work completed 70,000 Credit: Work in process 70,000

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