ACTG 1P11 Lecture Notes - Financial Statement, Remittance, Corporate Tax

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3 Oct 2014

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Company a, a manufacturer, buys raw materials for ,000. Company a then sells a finished product to company b, the wholesaler, for ,000. Company b sells that same product to a retailer, company c, for ,500. Company c sells the product to its end user (the consumer) for ,200. In this example, all sales and purchases are subject to the harmonized sales tax (h. s. t. ) of 13%. Assume the same information as in problem 1, except that the companies are all subject to the gst only, at 5%. Lee"s chinese imports has a single employee that is paid a bi-weekly salary of . Based on canada revenue agency"s deductions guide, the employee"s net pay entitlement is . 80, calculated as follows: Required: prepare the required payroll entries for lee"s to record payroll each pay period. Include all applicable employer costs related to deductions. Wawa washers inc. has just completed their fiscal year ending march 31, 2002.

Related Questions

In Ontario, the HST rate is 13 percent, in Alberta there is only GST of 5 percent. For which of the following transactions will the rate charged be 5 percent? Question 6 options:

A. An Ontario registrant ships a product to a recipient in Alberta.

B. An Ontario registrant sells a product to a resident of Alberta who is visiting Ontario.

C. An Alberta registrant ships a product to a recipient in Ontario.

D. A writer located in Alberta produces a book for a publisher located in Ontario and receives payment from the Ontario office.

The term "supply" as used in the Excise Tax Act would include all of the following except: Question 7 options:

A. The sale of a car by a car dealership.

B. The provision of engineering services by an engineering firm.

C. A trade of hairdressing services provided in exchange for tax advice.

D. The provision of employment services by an employee to their employer.

question 3: Johnâs Rooms is a new business which started on January 1, 2016. Its sales during its first four quarters of operation were as follows: Quarter Sales 1 - $13,000 2 - 18,000 3 - 24,000 4 - 27,000 On what date will Johnâs Rooms have to begin collecting GST? Question 3 options A. The date in the second quarter on which cumulative sales total $30,000. B. July 1, 2016. C. August 1, 2016. D. September 1, 2016.

Question 4: How does the Canadian government compensate for the regressive nature of the GST? Question 4 options: A. By allowing an exemption from the tax for lower income individuals. B. By ensuring that items purchased more frequently by lower income individuals are not subject to the tax. C. By providing lower income individuals with GST refunds. D. By providing a refundable GST tax credit that is available to lower income individuals.

Question 5: Kevin Knight, a lawyer, is a sole practitioner in the province of Ontario. The HST rate in Ontario is 13 percent. Kevin has requested that you advise him on what his HST remittance should be for the October to December quarter. Details of transactions, excluding HST, between October and December are: Revenues $30,000 Expenses: Salaries $ 7,000 Proprietorâs drawings 11,000 Office supplies 500 Rent 3,000 The HST that is to be remitted for the October to December quarter is: Question 5 options: A. $1,105. B. $2,535. C. $3,445. D. $3,835. E. None of the above.

Required:

1. Journalized the above transactions

2. Show the appropriate financial statement presentation for allliabilities.

Sundial Technologies produces and sells customized networksystems in New Brunswick. The company offers a 60-days, allsoftware and labor â and an extra 90-days, parts-only warranty onall of its products. The company had the following transactions in2013:

Jan 31 - Sales for the month totaled $350,000 (not includingHST), of which 95% were on credit. The company collects 13% HST onall sales and estimates its warranty cost at 2% of sales.

Jan 31 â Based on last yearâs property tax assessment, estimatedthat the property taxes for the year would be $114,000 (6% of lastyearâs $1,900,000 assessed value). Recorded the estimated propertytaxes for the month; credit Property Taxes Payable.

Feb 4 â Completed repair work for a customer. The software($3000) and labor ($3250) were all covered under the warranty.

February 7 â Remitted the appropriate HST for the month ofJanuary (the company had paid $15,610 HST on purchases inJanuary).

Feb 28 â Recorded the estimated property taxes for the month ofFebruary.

Feb 28 â Sales for the month totaled $325,000 (not includingHST), of which 90% were on credit. The company estimates itswarranty costs at 2% of sales.

Mar 7 â Remitted the appropriate HST for the month of February(the company had paid $18,648 HST on purchases in February).

Mar 8 â Sundial Technologies received notice that it was beingsued by a customer for an error resulting from the failure of itsproduct. The companyâs lawyer was reluctant to estimate the likelyoutcome of the lawsuit, but another customer indicated that asimilar case had resulted in a $100,000 settlement.

Mar 15 â Completed repair work for a customer. The software($3500) and labor ($2750) were all covered under the warranty.

Mar 21 â Completed Repair work for a customer. The software($1500) was covered by the warranty, but the labor ($1650) was not.Payment for the labor is due from the customer in 30 days.

Mar 31 â Sales for the month totaled $315,000 (not includingHST), of which 80% was on credit. The company estimates itswarranty costs will increase to 4% of sales.

Mar 31 â Received the property tax assessment for 2013. Itshowed the assessed value of the property to be $2,300,000 and atax rate of 5.6 % of the assessed value. The company made theappropriate adjustment and used the Property Taxes Payable account.Property tax will be paid on December 31, 2013.

General Journal
DATE 2014	ACCOUNT TITLES AND EXPLANATIONS	POST. REF.	DEBIT	CREDIT

SUNDIAL TECHNOLOGIES
Balance Sheet
March 31, 2014
LIABILITIES

silverdonkey577

Required information

Problem 7-1A Special journals, subsidiary ledgers, trialbalance-perpetual LO C3, P1, P2

[The following information applies to the questionsdisplayed below.]

Church Company completes these transactions and events during Marchof the current year (terms for all its credit sales are 3/10,n/30).

Mar.	1		Purchased $40,000 of merchandisefrom Van Industries, invoice dated March 1, terms 3/15, n/30.
	2		Sold merchandise on credit to MinCho, Invoice No. 854, for $16,000 (cost is $8,000).
	3	(a)	Purchased $1,200 of office supplieson credit from Gabel Company, invoice dated March 3, terms n/10EOM.
	3	(b)	Sold merchandise on credit to LindaWitt, Invoice No. 855, for $8,000 (cost is $4,000).
	6		Borrowed $72,000 cash from FederalBank by signing a long-term note payable.
	9		Purchased $20,000 of officeequipment on credit from Spell Supply, invoice dated March 9, termsn/10 EOM.
	10		Sold merchandise on credit toJovita Albany, Invoice No. 856, for $4,000 (cost is $2,000).
	12		Received payment from Min Cho forthe March 2 sale less the discount.
	13	(a)	Sent Van Industries Check No. 416in payment of the March 1 invoice less the discount.
	13	(b)	Received payment from Linda Wittfor the March 3 sale less the discount.
	14		Purchased $34,000 of merchandisefrom the CD Company, invoice dated March 13, terms 3/10, n/30.
	15	(a)	Issued Check No. 417, payable toPayroll, in payment of sales salaries expense for the first half ofthe month, $15,200. Cashed the check and paid the employees.
	15	(b)	Cash sales for the first half ofthe month are $64,000 (cost is $51,200). (Cash sales are recordeddaily, but are recorded only twice here to reduce repetitiveentries.)
	16		Purchased $1,720 of store supplieson credit from Gabel Company, invoice dated March 16, terms n/10EOM.
	17		Received a $3,400 credit memorandumfrom CD Company for the return of unsatisfactory merchandisepurchased on March 14.
	19		Received a $600 credit memorandumfrom Spell Supply for office equipment received on March 9 andreturned for credit.
	20		Received payment from Jovita Albanyfor the sale of March 10 less the discount.
	23		Issued Check No. 418 to CD Companyin payment of the invoice of March 13 less the March 17 return andthe discount.
	27		Sold merchandise on credit toJovita Albany, Invoice No. 857, for $12,000 (cost is $4,800).
	28		Sold merchandise on credit to LindaWitt, Invoice No. 858, for $4,800 (cost is $1,920).
	31	(a)	Issued Check No. 419, payable toPayroll, in payment of sales salaries expense for the last half ofthe month, $15,200. Cashed the check and paid the employees.
	31	(b)	Cash sales for the last half of themonth are $70,400 (cost is $42,240).
	31	(c)	Verify that amounts impactingcustomer and creditor accounts were posted and that any amountsthat should have been posted as individual amounts to the generalledger accounts were posted. Foot and crossfoot the journals andmake the month-end postings.

Assume the following ledger account amounts Inventory (March 1 beg.bal. is $63,000), Z. Church, Capital (March 1 beg. bal. is $63,000)and Church Company uses the perpetual inventory system.

Problem 7-1A Part 2

Required:
2-a. Enter the transactions in a sales journal.
2-b. Enter the transactions in a purchasesjournal.
2-c. Enter the transactions in a cash receiptsjournal.
2-d. Enter the transactions in a cashdisbursements journal.
2-e. Enter the transactions in a generaljournal.

Enter the transactions in a sales journal.

SALES JOURNAL
Date	Account Debited	Invoice Number	Accounts Receivable Dr. Sales Cr.	Cost of Goods Sold Dr. Inventory Cr.






Mar.31	Totals		$0	$0

Enter the transactions in a purchases journal.

PURCHASES JOURNAL
Date	Account	Date of Invoice	Terms	Accounts Payable Cr.	Inventory Dr.	Office Supplies Dr.	Other Accounts Dr.






Mar.31	Totals			$0	$0	$0	$0

Enter the transactions in a cash receipts journal.

CASH RECEIPTS JOURNAL
Date	Account Credited	Cash Dr.	Sales Discount Dr.	Accounts Receivable Cr.	Sales Cr.	Other Accts. Cr.	Cost of Goods Sold Dr. Inventory Cr.







Mar.31	Totals	$0	$0	$0	$0	$0	$0

Enter the transactions in a cash disbursements journal.

CASH DISBURSEMENTS JOURNAL
Date	Ck.No.	Payee	Account Debited	Cash Cr.	Inventory Cr.	Other Accounts Dr.	Accounts Payable Dr.





Mar.31		Totals		$0	$0	$0	$0

Enter the transactions in a general journal.

Journal Entry Worksheet

Received a $3,400 credit memorandum from CD Company for thereturn of unsatisfactory merchandise purchased on March 14.

Received a $600 credit memorandum from Spell Supply for officeequipment received on March 9 and returned for credit.

Mar. 17

*Enter debits before credits

Enter the transactions in a general journal.

Journal Entry Worksheet

Received a $3,400 credit memorandum from CD Company for thereturn of unsatisfactory merchandise purchased on March 14.

Received a $600 credit memorandum from Spell Supply for officeequipment received on March 9 and returned for credit.

Mar. 19

*Enter debits before credits

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ACTG 1P11 Lecture Notes - Financial Statement, Remittance, Corporate Tax

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