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: Jul. 3 Charged 175 hours of professional (lawyer) time to the Obsidian Co. 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 to the Obsidian case, $12,500.
14 Charged 260 hours of professional time for the Obsidian trial at a rate of $185 per hour.
18 Received invoice from consultants Wadsley and Harden for $30,000 for expert testimony related to the Obsidian trial.
27 Applied office overhead at a rate of $62 per professional hour charged to the Obsidian case.
31 Paid administrative and support salaries of $28,500 for the month.
31 Used office supplies for the month, $4,000.
31 Paid professional salaries of $74,350 for the month.
31 Billed Obsidian $172,500 for successful defense of the case.
Required:
A. Provide the journal entries for each of these transactions.
B. How much office overhead is over- or underapplied?
C. Determine the gross profit on the Obsidian case, assuming that over- or underapplied office overhead is closed monthly to cost of services.

3-July

Dr Work in process 25,500

Cr Salaries payable 25,500

10-Jul

Dr Work in process 12,500

Cr Cash 12,500

14-Jul

Dr Work in process 48,100

Cr Salaries payable 48,100

18-Jul

Dr Work in process 30,000

Cr Consultant fees payable 30,000

27-Jul

Dr Work in process 26,660

Cr Office overhead 26,660

31-Jul

Dr Office overhead 28,500

Cr Cash 28,500

31-Jul

Dr office overhead 4,000

Cr Supplies 4,000

31-Jul

Dr Salaries payable 74,350

Cr Cash 74,350

31-Jul

Dr Accounts receivable 172,500

Cr Fees earned 172,500

31-Jul

Dr Cost of services 142,760

Cr Work in process 142,760

b. $5,840 Over applied

c. $35,580

Explanation:

Preparation of the journal entries for each of these transactions.

3-Jul

Dr Work in process 25,500

Cr Salaries payable 25,500

(170 hours ×150 per hour)

10-Jul

Dr Work in process 12,500

Cr Cash 12,500

14-Jul

Dr Work in process 48,100

Cr Salaries payable 48,100

(260 hours ×185 per hour)

18-Jul

Dr Work in process 30,000

Cr Consultant fees payable 30,000

27-Jul

Dr Work in process 26,660

Cr Office overhead 26,660

(170 hours +260 hours)*62

31-Jul

Dr Office overhead 28,500

Cr Cash 28,500

31-Jul

Dr office overhead 4,000

Cr Supplies 4,000

31-Jul

Dr Salaries payable 74,350

Cr Cash 74,350

31-Jul

Dr Accounts receivable 172,500

Cr Fees earned 172,500

31-Jul

Dr Cost of services 142,760

(25,500+12,500+48,100+30,000+26,660)

Cr Work in process 142,760

b. Calculation for the office overhead

Office overhead =(28,500+4,000)-26,660

Office overhead=32,500-26,660

Office overhead=$5,840 Over applied

Therefore the office overhead is $5,840 over applied w

C. Calculation to Determine the gross profit

Fees earned 172,500

Less Cost of services (136,920)

(142,760-5,840)

Gross profit $35,580

Therefore the gross profit will be $35,580

3rd the reason why is because of management and leadership

answer; foreign exchange transaction;