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Unformatted text preview: agers Use Payroll Information? Wages and salaries form a large part of a company’s expenses. Accurate and timely payroll records will assist management in planning and controlling these expenses. This information can be used in the following ways: • • To determine whether overtime is justified or is a sign of possible inefficiency. To compare actual amounts to budgeted amounts to reveal any unplanned overtime and the reason for it. This information helps managers investigate any amounts that were not expected or were unusual. After identifying any irregularities, managers can determine what caused them and how to resolve them. Management should also put internal controls in place to prevent errors and fraud. For example, payroll records should be audited carefully and payroll procedures should be evaluated periodically. 324 Chapter 12 Payroll Accounting 308-337_CH12_868829.indd 324 9/15/05 11:46:23 AM Assessment SECTION 3 AFTER YOU READ Reinforce the Main Idea Use a diagram like this one to show the similarities and differences between the payroll register and the employee’s earnings record. Table Title Table Title Table Title Table Title Do the Math While reviewing the payroll records from the past two years for Sports Junction, an athletic supply store, you notice that the increasing payroll cost could be holding down overall company profits. The company’s payroll costs and revenue for the last eight quarters are provided. Use spreadsheet, accounting, or graphics software to create a line chart to compare the costs and revenue graphically. Analyze the chart, and make a recommendation to Sports Junction’s management about the salary levels. Do you recommend downsizing to increase profit? Qtr 1 24,000 136,700 Payroll Revenue Year 1 Qtr 2 Qtr 3 24,500 28,670 151,200 183,500 Qtr 4 35,280 234,000 Year 2 Qtr 2 Qtr 3 42,000 53,000 142,500 143,000 Qtr 1 34,000 143,000 Qtr 4 68,000 138,500 Problem 12–4 Preparing a Payroll Check Use the information on the payroll register for Heather’s Dance School and the form in the working papers to prepare a payroll check for Janice Burns for the week ending March 23, 20--. PAYROLL REGISTER 1 18 Burns, Janice TOTAL HOURS ALLOW. NAME MAR. STATUS EMPLOYEE NUMBER PAY PERIOD ENDING March 23 RATE S 1 42 7.80 20 -- DATE OF PAYMENT March 23, 20-- EARNINGS REGULAR 312 00 OVERTIME 23 40 DEDUCTIONS TO...
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This note was uploaded on 01/16/2014 for the course BUSINESS Accounting taught by Professor Dr.stevenhall during the Fall '13 term at Del Mar College.

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