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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. Refer to the Chart of Accounts for exact wording of account titles.
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.

CHART OF ACCOUNTS
Furlan and Benson
General Ledger
ASSETS 110 Cash 121 Accounts Receivable 125 Notes Receivable 126 Interest Receivable 132 Work in Process 133 Office Overhead 141 Supplies 142 Prepaid Insurance 143 Prepaid Expenses 191 Office Equipment 192 Accumulated Depreciation-Office Equipment LIABILITIES 210 Accounts Payable 221 Utilities Payable 231 Notes Payable 236 Interest Payable 241 Lease Payable 251 Salaries Payable 252 Consultant Fees Payable EQUITY 311 Common Stock 340 Retained Earnings 351 Dividends 390 Income Summary	REVENUE 410 Fees Earned 610 Interest Revenue EXPENSES 510 Cost of Services 520 Salaries Expense 532 Insurance Expense 533 Utilities Expense 534 Office Supplies Expense 540 Administrative Expenses 560 Depreciation Expense-Office Equipment 590 Miscellaneous Expense 710 Interest Expense

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