ABC Inc recognizes audit fees over 12 months. The engagement letter from Moss Adams for work to
Question:
ABC Inc recognizes audit fees over 12 months. The engagement letter from Moss Adams for work to be done in 2021 shows audit fees of $30,000 and estimated out-of-pocket expenses at 6% of audit fees. The engagement letter requires a down payment of $5,000 on December 15, 2020. On March 1, 2021, ABC was invoiced for $1,000 and issued a check on the same day.
Prepare journal entries for the following transactions: |
a). Payment of $5,000 down payment on 12/15/20.
b). Prepare the journal entry on 1/31/2021 recognizing audit fee expense.
c). Prepare the journal entry on 2/28/2021 recognizing audit Fee expense.
d). Prepare the journal entry for the 3/1/21 payment
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d). Prepare the journal entry on 3/31/2021 recognizing audit fee expense.
e). What is the Prepaid Audit Fee balance as of 1/31/2021; 2/28/2021 and 3/31/2021?
Accounting Business Reporting For Decision Making
ISBN: 9780730302414
4th Edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver