You are auditing payroll for the Reel In
Technologies company for the year ended October 31, 2019.
Included next are amounts from the client's trial balance, along with comparative audited information for the prior year. the icon to view the amounts from the trial balance.) the icon to view the additional information.) Question content area bottom
Part 1
(Note 1: When computing the expected value of factory hourly payroll, you must take into consideration both the 2%
wage increase and the 12%
increase in the number of units produced and sold. Note 2: Use the increase in the 10/31/2019
preliminary sales balance over the 10/31/2018
audited sales balance to determine the expected value for sales commissions on 10/31/2019.)
uiz Data table client's the orm he a ne al Audited Preliminary Balance Balance 10/31/2018 10/31/2019 Sales $ 54,009,200 $ 62,650,672 Executive salaries 530,284 576,886 Factory hourly payroll 10,594,822 11,302,991 Factory supervisors' salaries 759,699 840,392 Office salaries 1,948,375 2,905,881 Sales commissions 2,829,581 3,059,893 "Sales have increased 16% over prior year. 4% percent of that is due to an increase in the average selling price. The remaining 12% is attributed to an increase in the number of units sold. the 12 ales ba ne ex and s mmit Print Done Data table Audited Preliminary Balance Balance 10/31/2018 10/31/2019 Sales* $ 54,009,200 $ 62,650,672 Executive salaries 530,284 576,886 Factory hourly payroll 10,594,822 11,302,991 Factory supervisors' salaries 759,699 840,392 Office salaries 1,948,375 2,905,881 Sales commissions 2,829,581 3,059,893 *Sales have increased 16% over prior year. 4% percent of that is due to an increase in the average selling price. The remaining 12% is attributed to an increase in the number of units sold. Print Done ui: More info the form the a the a You have obtained the following information to help you perform preliminary analytical procedures for the payroll account balances. 1. There has been a significant increase in the demand for Reel In's products. The increase in sales was due to both an increase in the average selling price of 4 percent and an increase in units sold that resulted from the increased demand and an increased marketing effort. 2. Even though sales volume increased, there was no addition of executives, factory supervisors, or office personnel. 3. All employees including executives, but excluding commission salespeople, received a 2 percent salary increase starting November 1, 2018. Commission salespeople receive their increased compensation through the increase in sales 4. The increased number of factory hourly employees was accomplished by recalling employees that had been laid off. They receive the same wage rate as existing employees. Reel in does not permit overtime. 5. Commission salespeople receive a 7 percent commission on all sales on which a commission is given. Approximately 70 percent of sales earn sales the e and s commit Print Done ---- The increase in sales was due to both an increase in the average selling price of 4 percent and an increase in units sold that resulted from the increased demand and an increased marketing effort. 2. Even though sales volume increased, there was no addition of executives, factory supervisors, or office personnel. 3. All employees including executives, but excluding commission salespeople, received a 2 percent salary increase starting November 1, 2018. Commission salespeople receive their increased compensation through the increase in sales. 4. The increased number of factory hourly employees was accomplished by recalling employees that had been laid off. They receive the same wage rate as existing employees. Reel In does not permit overtime. 5. Commission salespeople receive a 7 percent commission on all sales on which a commission is given. Approximately 70 percent of sales earn sales commission. The other 30 percent are "call-ins," for which no commission is given. Commissions are paid in the month following the month they are earned. Print Done uiz Data table client's the orm he a ne al Audited Preliminary Balance Balance 10/31/2018 10/31/2019 Sales $ 54,009,200 $ 62,650,672 Executive salaries 530,284 576,886 Factory hourly payroll 10,594,822 11,302,991 Factory supervisors' salaries 759,699 840,392 Office salaries 1,948,375 2,905,881 Sales commissions 2,829,581 3,059,893 "Sales have increased 16% over prior year. 4% percent of that is due to an increase in the average selling price. The remaining 12% is attributed to an increase in the number of units sold. the 12 ales ba ne ex and s mmit Print Done Data table Audited Preliminary Balance Balance 10/31/2018 10/31/2019 Sales* $ 54,009,200 $ 62,650,672 Executive salaries 530,284 576,886 Factory hourly payroll 10,594,822 11,302,991 Factory supervisors' salaries 759,699 840,392 Office salaries 1,948,375 2,905,881 Sales commissions 2,829,581 3,059,893 *Sales have increased 16% over prior year. 4% percent of that is due to an increase in the average selling price. The remaining 12% is attributed to an increase in the number of units sold. Print Done ui: More info the form the a the a You have obtained the following information to help you perform preliminary analytical procedures for the payroll account balances. 1. There has been a significant increase in the demand for Reel In's products. The increase in sales was due to both an increase in the average selling price of 4 percent and an increase in units sold that resulted from the increased demand and an increased marketing effort. 2. Even though sales volume increased, there was no addition of executives, factory supervisors, or office personnel. 3. All employees including executives, but excluding commission salespeople, received a 2 percent salary increase starting November 1, 2018. Commission salespeople receive their increased compensation through the increase in sales 4. The increased number of factory hourly employees was accomplished by recalling employees that had been laid off. They receive the same wage rate as existing employees. Reel in does not permit overtime. 5. Commission salespeople receive a 7 percent commission on all sales on which a commission is given. Approximately 70 percent of sales earn sales the e and s commit Print Done ---- The increase in sales was due to both an increase in the average selling price of 4 percent and an increase in units sold that resulted from the increased demand and an increased marketing effort. 2. Even though sales volume increased, there was no addition of executives, factory supervisors, or office personnel. 3. All employees including executives, but excluding commission salespeople, received a 2 percent salary increase starting November 1, 2018. Commission salespeople receive their increased compensation through the increase in sales. 4. The increased number of factory hourly employees was accomplished by recalling employees that had been laid off. They receive the same wage rate as existing employees. Reel In does not permit overtime. 5. Commission salespeople receive a 7 percent commission on all sales on which a commission is given. Approximately 70 percent of sales earn sales commission. The other 30 percent are "call-ins," for which no commission is given. Commissions are paid in the month following the month they are earned. Print Done
