Shown below are the Job cost related accounts for the law firm of Jack, Bob, and

Question

Shown below are the Job cost related accounts for the law firm of Jack, Bob, and Will and their manufacturing equivalents: Cost data for the month of March follow. Purchased supplies on account $2,220. Issued supplies $1,500 (60% direct and 40% indirect). Assigned labor costs based on time cards for the month which indicated labor costs of $69,600 (80% direct and 20% Indirect). Operating overhead costs Incurred for cash totaled $44,420. Operating overhead is applied at a rate of 90% of direct attorney cost. Work completed totaled $82,120. Journalise the transactions for March. (Credit account titles are automatically Indented when amount Is entered. Do not indent manually.) Determine the balance of the Service Contracts m Process account. Balance of Service Contracts in Process account.

Explanation / Answer

1 Row material A/c Dr 2220 To Vendore A/C Cr 2220 (Being row materials purchase ) 2 Work inproess inventary A/c Dr 1500 To Manufacturing overhead Direct A/c Cr 900 To Manufacturing overhead indirect A/c Cr 600 ( Being row material issued to manufacturing overhead ) 1500x60%=900 1500x40%=600 3 Work in process labour A/c Dr 69600 To manufacturing labour direct A/C Cr 55680 To manufactruing labour indirect A/c Cr 13920 ( Being working labour shared between direct and indirect labour overhead ) 69600x80%=55680 69600x20%=13920 4 Manufacturing over head A/c Dr 105000 To Respectiver department 105000 ( Being cash transferred to operating overhead ) 5 Manufacturing overhead 444220 Account payable 444220 ( Being operation overhead accounted ) 6 Cost of goods sold 82120 Finished goods inventory 82120 ( Being cost of goods soled ) Balance of service contracts in process account 49357.78

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