Lime Co.’s payroll for the month ended January 31, year 2,
is summarized as follows:
Total wages $10,000
Federal income tax withheld 1,200
All wages paid were subject to FICA. FICA tax rates were 7%
each for employee and employer. Lime remits payroll taxes on
the 15th of the following month. In its financial statements for
the month ended January 31, year 2, what amounts should Lime
report as total payroll tax liability and as payroll tax expense?

Liability
Expense