Financial Accounting
14th Edition
ISBN: 9781305088436
Author: Carl Warren, Jim Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 11, Problem 14E
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…
Payroll Internal Control Procedures
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 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/ manager 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?
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 - On October 12, Belleville Co. borrowed cash from...Ch. 11 - Proceeds from notes payable On January 26, Nyree...Ch. 11 - Prob. 2PEACh. 11 - Prob. 2PEBCh. 11 - Prob. 3PEACh. 11 - Prob. 3PEBCh. 11 - The payroll register of Konrath Co. indicates...Ch. 11 - Journalize period payroll The payroll register of...Ch. 11 - Prob. 5PEACh. 11 - Prob. 5PEBCh. 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 - Bon Nebo Co. sold 25,000 annual subscriptions of...Ch. 11 - Entries for notes payable Cosimo Enterprises...Ch. 11 - Evaluating alternative notes A borrower has two...Ch. 11 - Entries for notes payable A business issued a...Ch. 11 - A business issued a 60-day note for 75,000 to a...Ch. 11 - On June 30, Collins Management Company purchased...Ch. 11 - Prob. 7ECh. 11 - Prob. 8ECh. 11 - Prob. 9ECh. 11 - Summary payroll data In the following summary of...Ch. 11 - Prob. 11ECh. 11 - The payroll register for Proctor Company for the...Ch. 11 - Prob. 13ECh. 11 - Prob. 14ECh. 11 - Prob. 15ECh. 11 - A business provides its employees with varying...Ch. 11 - Prob. 17ECh. 11 - Prob. 18ECh. 11 - Prob. 19ECh. 11 - Accrued product warranty General Motors...Ch. 11 - Prob. 21ECh. 11 - Quick ratio Gmeiner Co. had the following current...Ch. 11 - The current assets and current liabilities for...Ch. 11 - The following items were selected from among the...Ch. 11 - The following information about the payroll for...Ch. 11 - Prob. 3PACh. 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 - Jocame Inc. began business on January 2, 2015....Ch. 11 - Prob. 4PBCh. 11 - Payroll accounts and year-end entries The...Ch. 11 - Prob. 3CPPCh. 11 - Tonya Latirno is a certified public accountant...Ch. 11 - Recognizing pension expense The annual examination...Ch. 11 - Prob. 3CPCh. 11 - Prob. 5CP
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