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27 August, 15:43

A law firm, Morris & Morris, accumulates costs associated with individual cases using a job order cost system. On August 5, the firm charged 200 hours of professional (lawyer) time to the Micro Systems Co. breach of contract suit to prepare for the trial, at a rate of $340 per hour. What is the journal entry for this transaction?

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  1. 27 August, 16:35
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    Given that,

    On august 5,

    Firm charged = 200 hours of lawyer time

    Rate per hour = $340

    Therefore,

    Salaries payable = Number of hours * Rate per hour

    = 200 hours * $340 per hour

    = $68,000

    Hence, the journal entry for this transaction is as follows:

    Work in process A/c Dr. $68,000

    To Salaries payable A/c $68,000
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