Question
Wahoo Company's payroll for the month ended January 31 is summarized as follows: Total wages$10,000Federal income tax withheld$1,200 All wages paid were subject to FICA.
Wahoo Company's payroll for the month ended January 31 is summarized as follows:
Total wages$10,000Federal income tax withheld$1,200All wages paid were subject to FICA. FICA tax rates were 7% each for employee and employer. ABC remits payroll taxes on the 15th of the following month. In its financial statements for the month ended January 31, what amounts should ABC report as total payroll tax liability and as payroll tax expense?
Group of answer choices
Payroll tax liability: $1,200; Payroll tax expense: $1,400
Payroll tax liability: $2,600; Payroll tax expense: $700
Payroll tax liability: $1,400; Payroll tax expense: $700
Payroll tax liability: $1,900; Payroll tax expense: $1,400
Payroll tax liability: $1,900; Payroll tax expense: $700
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Auditing Cases An Interactive Learning Approach
Authors: Mark S. Beasley, Frank A. Buckless, Steven M. Glover, Douglas F. Prawitt
5th edition
132567237, 978-0132998345, 132998343, 978-0132567237
