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You are auditing payroll for the Harbor Creek Technologies company for the year ended October 31, 2016. Included next are amounts from the client's trial balance, along with comparative audited information for the prior year. (Click the icon to view the amounts from the trial balance.) A (Click the icon to view the additional information.) Requirements a. Use the final balances for the prior year and the information in items 1 through 5 to develop an expected value for each account, except sales. (Round to the nearest whole dollar.) b. Calculate the difference between your expectation and the client's recorded amount as a percentage using the formula (expected value-recorded amount)/expected value. (Round to the nearest hundredth percent, X.XX%.) value for sales commissions on 10/31/2016.) Requirement a. (B) Expected Value 10/31/2016 Executive salaries Factory hourly payroll (see Note 1) Factory supervisors' salaries Office salaries Sales commissions (see Note 2) Preliminary Balance 10/31/2016 592,003 11,597,899 809,654 2,805,832 2,593,315 Audited Balance Preliminary Balance 10/31/2015 10/31/2016 Sales 54,009,200 $ 59,410,120 Executive salaries 570,004 592,003 Factory hourly payroll 10,399,587 11,597,899 Factory supervisors' salaries 659,285 809,654 Office salaries 2,123,405 2,805,832 Sales commissions 2,496,977 2,593,315 *Sales have increased 10% over prior year. 3% percent of that is due to an increase in the average selling price. The remaining 7% is attributed to an increase in the number of units sold. 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 Harbor Creek's products. The increase in sales was due to both an increase in the average selling price of three 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 seven percent salary increase starting November 1, 2015. 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. Harbor Creek does not permit overtime. 5. Commission salespeople receive a six percent commission on all sales on which a commission is given. Approximately 90 percent of sales earn sales commission. The other 10 percent are "call-ins," for which no commission is given. Commissions are paid in the month following the month they are earned. You are auditing payroll for the Harbor Creek Technologies company for the year ended October 31, 2016. Included next are amounts from the client's trial balance, along with comparative audited information for the prior year. (Click the icon to view the amounts from the trial balance.) A (Click the icon to view the additional information.) Requirements a. Use the final balances for the prior year and the information in items 1 through 5 to develop an expected value for each account, except sales. (Round to the nearest whole dollar.) b. Calculate the difference between your expectation and the client's recorded amount as a percentage using the formula (expected value-recorded amount)/expected value. (Round to the nearest hundredth percent, X.XX%.) value for sales commissions on 10/31/2016.) Requirement a. (B) Expected Value 10/31/2016 Executive salaries Factory hourly payroll (see Note 1) Factory supervisors' salaries Office salaries Sales commissions (see Note 2) Preliminary Balance 10/31/2016 592,003 11,597,899 809,654 2,805,832 2,593,315 Audited Balance Preliminary Balance 10/31/2015 10/31/2016 Sales 54,009,200 $ 59,410,120 Executive salaries 570,004 592,003 Factory hourly payroll 10,399,587 11,597,899 Factory supervisors' salaries 659,285 809,654 Office salaries 2,123,405 2,805,832 Sales commissions 2,496,977 2,593,315 *Sales have increased 10% over prior year. 3% percent of that is due to an increase in the average selling price. The remaining 7% is attributed to an increase in the number of units sold. 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 Harbor Creek's products. The increase in sales was due to both an increase in the average selling price of three 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 seven percent salary increase starting November 1, 2015. 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. Harbor Creek does not permit overtime. 5. Commission salespeople receive a six percent commission on all sales on which a commission is given. Approximately 90 percent of sales earn sales commission. The other 10 percent are "call-ins," for which no commission is given. Commissions are paid in the month following the month they are earned

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