Refer to the data in exercise 7-1. Show what Encore would report on its balance sheet at February 28, and on its income statement for the month ended on that date.

Exercise 7-1

Encore Records has two employees who are paid on the 1st and 15th of each month for the work they performed in the preceding half-month. At February 28, each employee is owed gross pay of \(\$ 1,000\), but each one must have \(10 \%\) of their pay withheld for income taxes. Each must also make Canada Pension Plan contributions of \(5.1 \%\) of their gross pay and pay Employment Insurance premiums of \(1.62 \%\) of their gross pay. Prepare the payroll journal entries required to reflect these amounts, along with Encore's share of CPP contributions and EI premiums, in Encore's February 28 financial statements.