Financial Accounting
15th Edition
ISBN: 9781337272124
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 11, Problem 15E
To determine
Identify whether Restaurant B has internal controls to catch the payroll error.
To determine
Identify the way to detect the payroll error.
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Big Howie’s Hot Dog Stand is a fast-food restaurant specializing in hot dogs and hamburgers. The store employs 8 full-time and 12 part-time workers. The store’s weekly payroll averages $5,600 for all 20 workers. Big Howie’s Hot Dog Stand uses a personal computer to assist in preparing paychecks. Each week, the store’s accountant collects employee time cards and enters the hours worked into the payroll program. The payroll program calculates each employee’s pay and prints a paycheck. The accountant uses a check-signing machine to sign the paychecks. Next, the restaurant’s owner authorizes the transfer of funds from the restaurant’s regular bank account to the payroll account.For the week of May 12, the accountant accidentally recorded 100 hours worked instead of 40 hours for one of the full-time employees.Does Big Howie’s Hot Dog Stand have internal controls in place to catch this error? If so, how will this error be detected?
The following describes the payroll procedures for Cooper Toy Train Company.
Every Thursday, Raj, the timekeeping clerk, keys the timecard data from the employees into the
system, prints a summary report, sends the summary report to Penny in the payroll department
where it is filed by date, and then files the timecards alphabetically and date.
The last Thursday of each month, Penny, the payroll clerk, processes the payroll which includes
calculating gross pay, calculating withholdings, calculating net pay, printing the checks, printing
the payroll summary report and the payroll file is updated. Penny then sends the checks and the
payroll summary report to Leonard in the cash disbursements department.
Leonard, the cash disbursements clerk, reconciles the payroll summary with the paychecks and
then records the transaction in the cash disbursements file. He then files the payroll summary by
date and sends the paychecks to the treasurer, Sheldon, for signing.
The signed checks are then…
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Internal control procedures
Dave's Scooters is a small manufacturer of specialty scooters. The company employs 14 production workers and four administrative persons. The following procedures are used to
process the company's weekly payroll:
a. Whenever an employee receives a pay raise, the supervisor must fill out a wage adjustment form, which is signed by the company president. This form is used to change the
employee's wage rate in the payroll system.
b. All employees are required to record their hours worked by clocking in and out on a time clock. Employees must clock out for lunch break. Due to congestion around the time
clock area at lunch time, management has not objected to having one employee clock their entire department in and out.
c. Whenever a salaried employee is terminated, Personnel authorizes Payroll to remove the employee from the payroll system. However, this procedure is not required when an
hourly worker is fired. Hourly employees only receive a paycheck if their…
Chapter 11 Solutions
Financial Accounting
Ch. 11 - Does a discounted note payable provide credit...Ch. 11 - Employees are subject to taxes withheld from their...Ch. 11 - Prob. 3DQCh. 11 - Prob. 4DQCh. 11 - Prob. 5DQCh. 11 - Prob. 6DQCh. 11 - Prob. 7DQCh. 11 - Prob. 8DQCh. 11 - When should the liability associated with a...Ch. 11 - Prob. 10DQ
Ch. 11 - Proceeds from notes payable On May 15, Maynard Co....Ch. 11 - Proceeds from notes payable On January 26, Nyree...Ch. 11 - Prob. 2PEACh. 11 - Prob. 2PEBCh. 11 - Prob. 3PEACh. 11 - Prob. 3PEBCh. 11 - Journalize period payroll The payroll register of...Ch. 11 - Journalize period payroll The payroll register of...Ch. 11 - Journalize payroll tax The payroll register of...Ch. 11 - Journalize payroll tax The payroll register of...Ch. 11 - Prob. 6PEACh. 11 - Prob. 6PEBCh. 11 - Prob. 7PEACh. 11 - Prob. 7PEBCh. 11 - Quick ratio Nabors Company reported the following...Ch. 11 - Quick ratio Adieu Company reported the following...Ch. 11 - Current liabilities Bon Nebo Co. sold 25,000...Ch. 11 - Entries for notes payable Cosimo Enterprises...Ch. 11 - Entries for discounting notes payable Ramsey...Ch. 11 - Evaluating alternative notes A borrower has two...Ch. 11 - Entries for notes payable A business issued a...Ch. 11 - Entries for discounted note payable A business...Ch. 11 - Entries for notes payable Bull City Industries is...Ch. 11 - Prob. 8ECh. 11 - Calculate payroll An employee earns 25 per hour...Ch. 11 - Prob. 10ECh. 11 - Summary payroll data In the following summary of...Ch. 11 - Payroll tax entries According to a summary of the...Ch. 11 - Payroll entries The payroll register for Gamble...Ch. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - Prob. 16ECh. 11 - Accrued vacation pay A business provides its...Ch. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Prob. 20ECh. 11 - Accrued product warranty General Motors...Ch. 11 - Prob. 22ECh. 11 - Quick ratio Gmeiner Co. had the following current...Ch. 11 - Prob. 24ECh. 11 - Liability transactions The following items were...Ch. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Wage and tax statement data on employer FICA tax...Ch. 11 - Prob. 4PACh. 11 - Payroll accounts and year-end entries The...Ch. 11 - Prob. 1PBCh. 11 - Entries for payroll and payroll taxes The...Ch. 11 - Wage and tax statement data and employer FICA tax...Ch. 11 - Prob. 4PBCh. 11 - Payroll accounts and year-end entries The...Ch. 11 - Prob. 3CPPCh. 11 - Ethics in Action Tonya Latirno is a staff...Ch. 11 - Prob. 2CPCh. 11 - Communication WBM Motorworks is a manufacturer of...Ch. 11 - Recognizing pension expense The annual examination...Ch. 11 - Prob. 7CP
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