Penske has an annual payroll of $215,000. In addition, the company incurs payroll tax expense of 12%.

Question:

Penske has an annual payroll of $215,000. In addition, the company incurs payroll tax expense of 12%. At December 31, Penske owes salaries of $7,800 and FICA and other payroll tax of $550. The company will pay these amounts early next year.
Show what Penske will report for the foregoing on its income statement for the year and on its year-end balance sheet.