Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 14E
To determine
Internal control: Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations. The following are the principles of internal control:
- Authorizing the responsibility
- Segregation of duties
- Documenting and recording transactions
- Physical controls
- Periodic independent verification
- Human resource controls
Payroll: The total payment that a company is required to pay to its employee for the services received is called as payroll.
To Identify: Whether Restaurant B has internal controls to catch the payroll error.
To determine
To Identify: The way to detect the payroll error.
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
<
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…
Employees at the Sagerod Manufacturing Company record their hours worked on paper time cards that are inserted into a time clock machine at the beginning and end of each shift. On Fridays, the supervisor collects the time cards, reviews and signs them, and sends them to the payroll clerk. The clerk calculates the pay for each employee and updates the employee earnings file. This involves adding a new record for each employee in the pay period that reflects the employee’s gross pay, tax deductions, and other withholdings for the period. The clerk then prepares a paycheck for each employee and records them in the check register. The check register and corresponding paychecks reflect each employee’s net earnings for the period. Based on these records, the clerk prepares a payroll summary, which is sent with the paychecks to the cash disbursements clerk. The clerk reviews the payroll summary, updates the cash disbursements journal to record the total payroll, and prepares a check for the…
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 in and out for an entire department.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 time cards show hours worked.…
Chapter 10 Solutions
Financial And Managerial Accounting
Ch. 10 - Does a discounted note payable provide credit...Ch. 10 - Employees are subject to taxes withheld from their...Ch. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - Prob. 6DQCh. 10 - Prob. 7DQCh. 10 - Installment notes require equal periodic payments....Ch. 10 - Prob. 9DQCh. 10 - Prob. 10DQ
Ch. 10 - On January 26, Nyree Co. borrowed cash from Conrad...Ch. 10 - Prob. 2BECh. 10 - The payroll register of Heritage Co. indicates...Ch. 10 - Prob. 4BECh. 10 - Prob. 5BECh. 10 - Journalizing installment notes On the first day of...Ch. 10 - Estimated warranty liability Quantas Industries...Ch. 10 - Adieu Company reported the following current...Ch. 10 - Bon Nebo Co. sold 30,000 annual subscriptions of...Ch. 10 - Entries for notes payable Bennett Enterprises...Ch. 10 - Evaluating alternative notes A borrower has two...Ch. 10 - A business issued a 120-day, 5% note for 60,000 to...Ch. 10 - A business issued a 60-day note for 60,000 to a...Ch. 10 - Fixed asset purchases with note On June 30,...Ch. 10 - Prob. 7ECh. 10 - An employee earns 30 per hour and 1.5 times that...Ch. 10 - Prob. 9ECh. 10 - Summary payroll data In the following summary of...Ch. 10 - According to a summary of the payroll of Mountain...Ch. 10 - Prob. 12ECh. 10 - Prob. 13ECh. 10 - Prob. 14ECh. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Prob. 17ECh. 10 - Prob. 18ECh. 10 - Entries for installment note transactions On the...Ch. 10 - Entries for installment note transactions On...Ch. 10 - Prob. 21ECh. 10 - Prob. 22ECh. 10 - Prob. 23ECh. 10 - Prob. 24ECh. 10 - The following items were selected from among the...Ch. 10 - Entries for payroll and payroll taxes The...Ch. 10 - Ehrlich Co. began business on January 2. Salaries...Ch. 10 - Prob. 4PACh. 10 - Payroll accounts and year-end entries The...Ch. 10 - Liability transactions The following items were...Ch. 10 - Entries for payroll and payroll taxes The...Ch. 10 - Wage and tax statement data and employer FICA tax...Ch. 10 - Prob. 4PBCh. 10 - Payroll accounts and year-end entries The...Ch. 10 - Prob. 1COMPCh. 10 - Amazon.com, Inc. (AMZN) is one of the largest...Ch. 10 - Prob. 2MADCh. 10 - Prob. 3MADCh. 10 - Neiman Marcus Group (NMG) is one of the largest...Ch. 10 - Prob. 5MADCh. 10 - Prob. 1TIFCh. 10 - Prob. 2TIFCh. 10 - Communication WBM Motorworks is a manufacturer of...Ch. 10 - Prob. 5TIF
Knowledge Booster
Similar questions
- Automated Application Controls. The following provides a brief description of the computerized payroll system used by Merriman in its biweekly processing of payroll for its employees.1. Employees automatically record their attendance (hours worked) as they log in at thebeginning and end of the workday.2. At the end of each payroll period (every two weeks), employees print and authorizetheir attendance records, submitting them to their supervisor. The computer prenumbersthese attendance records and generates them in chronological order based on when theemployee submits his or her final attendance for that payroll period.3. Supervisors review the attendance records submitted by their employees and authorizethese records, which the supervisors then forward to data entry conversion operators.4. Data conversion operators input the attendance record number, employee number, andhours worked from the attendance records that have been approved by the employeesupervisors into a file to be used…arrow_forward7. REA MODEL—CRYOGENICS’ PAYROLL SYSTEM Based on the general information about Cryogenics Inc., in Problem 6, the following describes the com- pany’s payroll procedures for the Tulsa OK, operations. Twice each month Cryogenics’ employees submit their time cards to their respective supervisor, who reviews, approves, and submits them to the payroll department. At that time, the human resources clerk also submits a personnel action form to the payroll clerk. The payroll clerk enters the information from these source documents into the employee records and then adds the employee hours to a payroll regis- ter reflecting employee pay rates, deductions, and job classification. One copy of the payroll register, along with the time cards, is filed in the payroll department, and one copy is sent to the AP depart- ment. Next, the payroll clerk prepares the employee paychecks and the payroll register and sends them to the cash disbursements department. The cash disbursement clerk signs the checks…arrow_forwardQuestion: wages and payroll the following system is used in a business regarding payment of the weekly wages to its 20 employees " the pay clerk prepares 20 correctly Labelled, sealed pay envelope and placed them next to the time book every Friday morning. When the employees come in the morning to sign the time book they pick their pay envelopes.' reqiured: please answer this question by: a) with reference to the above, identify one weakness of the system.arrow_forward
- The payroll department is asked to make a payroll summary of the workers employed by A-Z Company. The two workers, Jane and Max work for the selling department and the rest for admin department . Jane also contributes $45 to Canada Bond Saving and has instructed the employer to deduct from her pay. Each worker contributes $25 for Union Dues and $55 for hospital insurance. Further information is given to the accountant. Weekly Pay Employees Hours worked Hourly rate $ John 52 28 Jane 43 35 Max 47 42 REQUIRED Calculate the following Gross salary of each worker Tax to be deducted if the rate is 18% Employment insurance for both employee and employer [1.87%] Canada pension for both employee and employer [4.95%] Make a schedule for the employees using the format. Journalize the pay roll information of employees only. Calculate the total contributions that the employer has to make on his employees in terms of CPP and EIarrow_forwardPayroll Register and Payroll Journal Entry Mary Losch operates a travel agency called Mary’s Luxury Travel. She has five employees, all of whom are paid on a weekly basis. The travel agency uses a payroll register, individual employee earnings records, and a general journal. Mary’s Luxury Travel uses a weekly federal income tax withholding table. Refer to Figure 8-4 in the text. The payroll data for each employee for the week ended March 22, 20—, are shown. Employees are paid 1½ times the regular rate for working over 40 hours a week. Name No. ofAllowances MaritalStatus Total HoursWorked Mar. 16–22 Rate Total EarningsJan. 1–Mar. 15 Bacon, Andrea 4 M 45 $12.00 $5,540.00 Cole, Andrew 1 S 40 12.00 5,860.00 Hicks, Melvin 3 M 44 10.50 4,960.00 Leung, Cara 1 S 35 11.00 5,144.50 Melling, Melissa 2 M 40 13.00 4,732.00 Social Security tax is withheld from the first $128,400 of earnings at the rate of 6.2%. Medicare tax is withheld at the rate of 1.45%, and city earnings tax at…arrow_forwardPayroll Register and Payroll Journal Entry Mary Losch operates a travel agency called Mary’s Luxury Travel. She has five employees, all of whom are paid on a weekly basis. The travel agency uses a payroll register, individual employee earnings records, and a general journal. Mary’s Luxury Travel uses a weekly federal income tax withholding table. Refer to Figure 8-4 in the text. The payroll data for each employee for the week ended March 22, 20—, are given. Employees are paid 1½ times the regular rate for working over 40 hours a week. Name No. ofAllowances MaritalStatus Total HoursWorked Mar. 16–22 Rate Total EarningsJan. 1–Mar. 15 Bacon, Andrea 4 M 44 $14.00 $6,300.00 Cole, Andrew 1 S 40 15.00 6,150.00 Hicks, Melvin 3 M 44 13.50 5,805.00 Leung, Cara 1 S 36 14.00 5,600.00 Melling, Melissa 2 M 40 14.50 5,945.00 Social Security tax is withheld from the first $128,400 of earnings at the rate of 6.2%. Medicare tax is withheld at the rate of 1.45%, and city…arrow_forward
- Payroll Register and Payroll Journal Entry Mary Losch operates a travel agency called Mary’s Luxury Travel. She has five employees, all of whom are paid on a weekly basis. The travel agency uses a payroll register, individual employee earnings records, and a general journal. Mary’s Luxury Travel uses a weekly federal income tax withholding table. Refer to Figure 8-4 in the text. The payroll data for each employee for the week ended March 22, 20—, are given. Employees are paid 1½ times the regular rate for working over 40 hours a week. Name No. ofAllowances MaritalStatus Total HoursWorked Mar. 16–22 Rate Total EarningsJan. 1–Mar. 15 Bacon, Andrea 4 M 44 $14.00 $6,300.00 Cole, Andrew 1 S 40 15.00 6,150.00 Hicks, Melvin 3 M 44 13.50 5,805.00 Leung, Cara 1 S 36 14.00 5,600.00 Melling, Melissa 2 M 40 14.50 5,945.00 Social Security tax is withheld from the first $128,400 of earnings at the rate of 6.2%. Medicare tax is withheld at the rate of 1.45%, and city…arrow_forwardPayroll Register and Payroll Journal Entry Mary Losch operates a travel agency called Mary’s Luxury Travel. She has five employees, all of whom are paid on a weekly basis. The travel agency uses a payroll register, individual employee earnings records, and a general journal. Mary’s Luxury Travel uses a weekly federal income tax withholding table. Refer to Figure 8-4 in the text. The payroll data for each employee for the week ended March 22, 20—, are given. Employees are paid 1½ times the regular rate for working over 40 hours a week. Name No. ofAllowances MaritalStatus Total HoursWorked Mar. 16–22 Rate Total EarningsJan. 1–Mar. 15 Bacon, Andrea 4 M 44 $14.00 $6,300.00 Cole, Andrew 1 S 40 15.00 6,150.00 Hicks, Melvin 3 M 44 13.50 5,805.00 Leung, Cara 1 S 36 14.00 5,600.00 Melling, Melissa 2 M 40 14.50 5,945.00 Social Security tax is withheld from the first $128,400 of earnings at the rate of 6.2%. Medicare tax is withheld at the rate of 1.45%, and city…arrow_forwardPAYROLL REGISTER AND PAYROLL JOURNAL ENTRY Mary Losch operates a travel agency called Mary'sLuxury Travel. She has five employees,all of whom are paid on a weekly basis.The travel agency uses a payroll register, individual employee earnings records, and a generaljournal . Mary's Luxury Travel uses a weekly federal income tax withholding table like the one in Figure 8-4 on pages 288 and 289.The payroll data for each employee for the week ended March 22,20-, are given below_ Employees are paid 1Y,times the regular rate for working over 40 hours a week. $128,400 of earnings at the rate of 6.2%. Medicare tax is withheld at the rate of 1.45%, and city earnings tax at the rate of 1%, both applied to gross pay.Bacon and Leung have $15 withheld and Cole and Hicks have $10 withheld for health insurance.Bacon and Leung have$20 withheld to be invested in the travel agency's credit union. Cole has $38.75 withheld and Hicks has $18.75 withheld under a savings bond purchase plan. Mary's Luxury…arrow_forward
- Raspberry Co. operates an electric power station, which produces electricity 24 hrs a day, seven days a week. The company’s year-end is 30 June 18. You are an audit manager of Grapefruit & Co, the auditor of Raspberry Co. The interim audit has been completed and you are reviewing the documentation describing Raspberry Co’s payroll system. Systems notes – payroll Raspberry Co employs over 250 people and approximately 70% of the employees work in production at the power station. There are three shifts every day with employees working eight hours each. The production employees are paid weekly in cash. The remaining 30% of employees work at the head office in non-production roles and are paid monthly by bank transfer. The company has anHR department, responsible for setting up all new joiners. Pre-printed forms are completed by HR for all new employees and, once verified, a copy is sent to the payroll department for the employee to be set up for payment. This form includes the staff…arrow_forwardWhen employees arrive for work at Harlan Manufacturing, they punch their time cards at a time clock in an unsupervised area. Mary, the time-keeping clerk, tries to keep track of the employees but is often distracted by other things. Every Friday, she submits the time cards to Marsha, the payroll clerk.Marsha copies all time cards and files the copies in the employees’ folders. She uses employee wage records and tax tables to calculate the net pay for each employee. She sends a copy of the payroll register to the accounts payable department and files a copy in the payroll department. She updates the employee records with the earnings and prepares the payroll summary and sends it to the cash disbursements department along with the paychecks.After receiving the payroll summary, John, an accounts payable clerk, authorizes the cash disbursements department to prepare paychecks. John then updates the cash disbursements journal. The treasurer signs the paychecks and gives them to the…arrow_forwardPayroll Audit Procedures, Computers, and Sampling. You are the senior auditor in charge of the annual audit of Onward Manufacturing Corporation for the year ending December 31. The company is of medium size with only 300 employees. All 300 employees are union members paid by the hour at rates set forth in a union contract, a copy of which is furnished to you. Job and pay rate classifications are determined by a joint union– management conference, and a formal memorandum is placed in each employee’s personnel file.Every week, clock cards prepared and approved in the shop are collected and transmitted to the payroll department. The total of labor hours is summed on a calculator and entered on each clock card. Batch and hash totals are obtained for the following: (1) labor hours and (2) last four digits of Social Security numbers. These data are input into a disk file, batch balanced, and batch processed. The clock cards (with cost classification data) are sent to the cost accounting…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...AccountingISBN:9781305080577Author:Karla M Johnstone, Audrey A. Gramling, Larry E. RittenbergPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Auditing: A Risk Based-Approach to Conducting a Q...
Accounting
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,