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Question - Hungry Ltd employs its staff on a five-day work week, with employees being paid on Fridays. The weekly salaries expense is $12 000 and employees are paid in arrears (That is, when the employees are paid, the salaries paid are for work performed in the preceding week).
Hungry Ltd retains $4000 per week to pay the Australian Taxation Office for pay-as-you-go (PAYG) tax on behalf of the employees. This is paid on the following Monday of each week. It also retains $600 per week to pay staff premiums to the Organic Medical Benefits Fund. If we assume that the end of the reporting period falls on a Wednesday, what will be the accounting entry at the end of the accounting year?
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