Question

On January 13, 2018 Astra Ltd is preparing to close its financial statements for the year 2017.

At that date is has calculated the following accruals for 2017:

Electricity for December 2017 $2,000

Water for December $650

Audit fees for the year 2017 $5,500

On March 13 2018, it has paid the above expenses in full, however audit fees actually paid were $5,000 since the auditors decided to give a discount to the company.

Required:

Prepare the journal entries for 2017 and 2018 taking into account the above.

(10 marks)

Answer 1

Answer:- Summarized the information and data given in the question, Astoa atd., is preparing to close its financial statements JOURNAL ENTRIES: Date General Journal Debit I credit Jan 13 Electricity expense 2,000 2018 Electricity expense payable 2,000 Ho tecood electorcity expense) | Jan Bl water expense 650 2015 /water expense payable 650 (to becord water expense) Jan 13 Audit fee 5,560 2015 | Audit fee payable 5,500 (to secood audit feel match 13 Audit fee payable 5,500 cash 5000 Discount 500 (to record payment andit fee) 2018 * Please - please kindly Up- vote Thank you a