Question
You are auditing payroll for Trexler Technologies, year end June 30, 2019. Included are the amounts from the company's trial balance and prior year audited
You are auditing payroll for Trexler Technologies, year end June 30, 2019. Included are the amounts from the company's trial balance and prior year audited balances.
Account | June 30, 2018 | June 30, 2019 | |
Sales | $51,316,234 | $57,474,182 | |
1. Executive Salaries | 546,940 | 615,970 | |
2. Factory hourly payroll | 10,038,877 | 11,476,319 | |
3. Factory supervisors Salary | 785,825 | 810,588 | |
4. Office salaries | 1,990,296 | 2,055,302 | |
5. Sales commission | 2,018,149 | 2,367,962 |
You have obtained the following information to help perform preliminary analytical procedures for payroll balances:
- Trexlers demand for their products has shown a significant increase. The increase in sales was due to an increase in average selling price of 4% along with an increase in units sold due to an increase in marketing.
- Even though sales volume increased, there was no addition of executives, factory supervisors, or office personnel.
- All employees and executives, with the exception of commissioned sales people, received a 3% salary increase starting May 1, 2018. commissioned salespeople receive their increase through sales.
- The increased number of hourly factory employees was accomplished by recalling laid off employees. They receive the same rate as existing employees. Trexler does not pay overtime.
- commissioned sales people receive a 5% commission on all sales on which a sale is permitted.approximately 75% of all sales earn a sales commission. The other 25% are orders place online or "called in" and do not payout commissions. Commissions are paid in the month following the sale in which they are earned.
Instructions:
1 - 5. Use the information provided and the prior balances to develop an expected value for each account except for sales. (Enter using a whole numbers and commas as need for example:123,465,789).
6-10. Calculate the difference between your expectation and the client's recorded amounts as a percentage using the formula: (expected value - recorded amount)/expected value. (Enter as a whole number for example: instead of 12.34% enter 12.34 or instead of a decrease or -12.34% write -12.34).
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