34.    LO.7 (Service industry; journal entries and CSR) Kalogrides & McMillan CPAs incurred the following costs in performing audits during September 2010. The firm uses a Work in Process Inventory account for audit engagement costs and records overhead in fixed and variable overhead accounts.

a.     Prepare journal entries for each of the following transactions:

 

•            Used $5,000 of previously purchased supplies on audit engagements.

•            Paid $8,000 of partner travel expenses to an accounting conference.

•            Recorded $6,500 of depreciation on laptops used in audits.

•            Recorded $1,800,000 of annual depreciation on the Kalogrides & McMillan Building, located in downtown New York; 65 percent of the space is used to house audit personnel.

•            Accrued audit partner salaries, $200,000.

•            Accrued remaining audit staff salaries, $257,900.

•            Paid credit card charges for travel costs for client engagements, $19,400.

•            One month’s prepaid insurance and property taxes expired on the downtown building, $17,300.

•            Accrued $3,400 of office assistant wages; the office assistant works only for the audit partners and staff.

•            Paid all accrued salaries and wages for the month.

b.    Determine the cost of audit services rendered for September 2010.