At September 30, 2022, the end of the first year of operations at Lukancic Incorporated, the firm's accountant neglected to accrue payroll taxes of $2, 189 that were applicable to payrolls for the year then ended. Exercise 7-9 (Algo) Part c c. Assume that when the payroll taxes were paid in October 2022, the payroll tax expense account was charged. Assume that at September 30, 2023, the accountant again neglected to accrue the payroll tax liability, which was $2,660 at that date. Determine the income statement and balance sheet effects of not accruing payroll taxes at September 30 2023

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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At September 30, 2022, the end of the first year of operations at Lukancic Incorporated, the
firm's accountant neglected to accrue payroll taxes of $2, 189 that were applicable to payrolls
for the year then ended. Exercise 7 - 9 (Algo) Part c c. Assume that when the payroll taxes
were paid in October 2022, the payroll tax expense account was charged. Assume that at
September 30, 2023, the accountant again neglected to accrue the payroll tax liability, which
was $2,660 at that date. Determine the income statement and balance sheet effects of not
accruing payroll taxes at September 30 2023
Transcribed Image Text:At September 30, 2022, the end of the first year of operations at Lukancic Incorporated, the firm's accountant neglected to accrue payroll taxes of $2, 189 that were applicable to payrolls for the year then ended. Exercise 7 - 9 (Algo) Part c c. Assume that when the payroll taxes were paid in October 2022, the payroll tax expense account was charged. Assume that at September 30, 2023, the accountant again neglected to accrue the payroll tax liability, which was $2,660 at that date. Determine the income statement and balance sheet effects of not accruing payroll taxes at September 30 2023
Effect on net income for year ended September 30, 2023:
Net effect is that expenses this year are
Effect on the September 30, 2023 balance sheet:
Current liabilities are
and net income this year is
too
and the retained earnings account is
too
Transcribed Image Text:Effect on net income for year ended September 30, 2023: Net effect is that expenses this year are Effect on the September 30, 2023 balance sheet: Current liabilities are and net income this year is too and the retained earnings account is too
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