ABC is closing its books for 2022 and asks firm XYZ for the amount to accrue for legal work performed in 2022 that won't be billed until 2023. The law firm estimates there's $100,000 of 2022 legal fees that will be billed after year-end. ABCt accrues the $100,000 in December. In Jan '23, XYZ bills ABC $60,000 for '22 legal work and indicates the remaining $40,000 will be billed in Feb 2023. In Feb, the law firm issues a final bill for 2022 legal work for $32,000 and ABC pays the law firm $92,000. show the December, January and February entries to record XYZ's legal fees on ABC's books. DATE JOURNAL DR CR Purchase 100,000 12/31/22 12/31/22 Purchase ACCOUNT Legal Expense Accounts Payable 100,000

ABC is closing its books for 2022 and asks firm XYZ for the amount to accrue for legal work performed in 2022 that won't be billed until 2023. The law firm estimates there's $100,000 of 2022 legal fees that will be billed after year-end. ABCt accrues the $100,000 in December. In Jan '23, XYZ bills ABC $60,000 for '22 legal work and indicates the remaining $40,000 will be billed in Feb 2023. In Feb, the law firm issues a final bill for 2022 legal work for $32,000 and ABC pays the law firm $92,000. show the December, January and February entries to record XYZ's legal fees on ABC's books. DATE JOURNAL DR CR Purchase 100,000 12/31/22 12/31/22 Purchase ACCOUNT Legal Expense Accounts Payable 100,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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