Account for payroll expense and liabilities
Response to the following problem:
Northeast Talent Search has an annual payroll of $168,000. In addition, the company incurs payroll tax expense of 8%. At December 31, Northeast owes salaries of $7,900 and FICA and other payroll tax of $915. The company will pay these amounts early next year.
Show what Northeast will report for the foregoing on its income statement for the year and on its year-end balance sheet.