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Question - Learning Objective: Reporting payroll expense and liabilities
Potvin Talent Search has an annual payroll of $160,000. In addition, the company incurs payroll tax expense of 9%. At December 31, Potvin owes salaries of $7,900 and FICA and other payroll tax of $850. The company will pay these amounts early next year.
Show what Potvin will report for the foregoing on its income statement and year-end balance sheet.
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