8th Canadian Edition Weygandt Exam Questions - Accounting Principles Vol 1 8e Canadian Complete Test Bank by Jerry J. Weygandt. DOCX document preview.
APpendix B: Sales Taxes
Exercises
Exercise 1
For the following provinces: New Brunswick, Newfoundland, Alberta, British Columbia, Yukon, identify which sales tax or taxes they charge.
Exercise 2
For the following provinces: Nunavut, Manitoba, Ontario, Prince Edward Island, Saskatchewan, identify which sales tax or taxes they charge.
Exercise 3
Identify the three types of sales taxes and to whom the remittance must be made.
Exercise 4
Here is a list of some typical goods and services:
Office supplies
Ready-to-eat pizza
One dozen doughnuts
Prescription drugs
Uncooked pizza
Municipal water
Instructions
For each item on the list, identify its GST/HST tax status as taxable, zero-rated, or exempt.
Exercise 5
Here is a list of some typical goods and services:
Banking services
Dental services
Building materials
Uncooked pizza
Prescription drugs
Instructions
For each item on the list, identify its GST/HST tax status as taxable, zero-rated, or exempt.
Exercise 6
Maine Event is a new salon located in Winnipeg, Manitoba. The following information relates to transactions that took place in June. Maine Event uses a perpetual inventory system and uses the earnings approach for revenue recognition.
June 3 In the salon, $ 500 worth of hair services were performed for cash. These services are subject to PST of 8% and GST.
4 A sale of $ 100 worth of products is made on account to James Zing. The cost of the product to Maine was $ 85.
10 James Zing returned $ 25 worth of product. This product had a cost of $ 15 and was returned to goods for resale.
30 James Zing paid his outstanding balance.
Instructions
Prepare the journal entries to record these transactions. Do not round amounts.
Exercise 7
The following information relates to transactions that took place in April for Trip n Trail Inc. Trip n Trail is located in Trail, BC, uses a perpetual inventory system, and uses the earnings approach for revenue recognition.
Apr. 2 In the shop, a total of $ 1,500 worth of back pack repair services were performed for cash. These services are subject to PST of 7% and GST.
6 Sales of $ 12,000 worth of camping-related merchandise were made on account to Trips R Us. The cost of the products to Trip was $ 8,500.
12 A return of $ 2,500 worth of products received from Trips R Us as they ordered an incorrect pack size. This product had a cost of $ 1,500 and was returned to goods available for sale.
30 Trips R Us settles their outstanding balance.
Instructions
Prepare the journal entries to record these transactions.
Exercise 8
Maine Event is a new salon located in Saint John, New Brunswick. The following information relates to transactions that took place in June. Maine Event uses a perpetual inventory system and uses the earnings approach for revenue recognition.
June 3 In the salon, $ 500 worth of hair services were performed for cash. These services are subject to HST of 15%.
4 A sale of $ 100 worth of products is made on account to James Zing. The cost of the product to Maine was $ 85.
10 James Zing returned $ 25 worth of product. This product had a cost of $ 15 and was returned to goods available for sale.
30 James Zing paid his outstanding balance.
Instructions
Prepare the journal entries to record these transactions. Do not round amounts.
Exercise 9
The following information relates to transactions that took place in April for Trip n Trail Inc. Trip n Trail is located in Fort Erie, Ontario, uses a perpetual inventory system, and uses the earnings approach for revenue recognition.
April 2 In the shop a total of $ 1,500 worth of back pack repair services were performed for cash. These services are subject to HST of 13%.
6 Sales of $ 12,000 worth of camping-related merchandise were made on account to Trips R Us. The cost of the products to Trip was $ 8,500.
12 A return of $ 2,500 worth of products received from Trips R Us as they ordered an incorrect pack size. This product had a cost of $ 1,500 and was returned to goods available for sale.
30 Trips R Us settles their outstanding balance.
Instructions
Prepare the journal entries to record these transactions.
Exercise 10
Great Green Landscaping sells lawn maintenance equipment. They use a perpetual inventory system and their operations are located in Manitoba. The Manitoba PST rate is 8%. The following transactions took place in May:
May 6 Purchased 350 trimmers for resale at $ 100 each before taxes from Trim It with terms 2/10, net 30, FOB shipping point.
16 Returned two of the trimmers as they were defective.
22 Picked up $ 250 worth of supplies to be used in the sales office and paid with cash.
31 Purchased two desks to be used in the sales office for $ 450 plus applicable taxes on account.
Instructions
Prepare the journal entries to record these transactions. Do not round amounts.
Exercise 11
Golf Green sells golfing equipment. The have a perpetual inventory system and their store is located in Ontario with an HST rate of 13%. The following transactions took place in May:
May 6 With terms 2/10, net 30, FOB shipping point Golf Green purchased 350 putters for resale at $ 100 each before taxes from Ting Inc.
16 As part of their spring-cleaning efforts, Sam picked up $ 300 worth of cleaning supplies and paid using cash.
22 Due to defects Gold returned two of the putters.
31 Purchased one new display unit for $ 600 plus applicable taxes on account.
Instructions
Prepare the journal entries to record these transactions.
Exercise 12
Home Essence sells home accessories and other decorating supplies. They have a perpetual inventory system and their business is located in British Columbia. BC’s PST rate is 7%. The following transactions took place in May:
May 6 A batch of 250 decorative vases were purchased for resale at $ 50 each before taxes from Sky View Decor Ltd. with terms 2/10, net 30, FOB shipping point.
16 Returned six of the vases as they were damaged in their packaging.
22 Picked up $ 100 worth of supplies for the office and paid with cash.
31 Purchased a display case for the store for $ 600 plus applicable taxes on account.
Instructions
Prepare the journal entries to record these transactions.
Exercise 13
Hockey Hus sells hockey equipment. They have a perpetual inventory system and their store is located in Ontario with an HST rate of 13%. The following transactions took place in October:
Oct. 6 Hockey Hus purchased a skid of skates for $ 45,000 before taxes with terms 2/10, net 30, FOB shipping point from Zip Zag Inc.
16 Paid $ 1,000 for cleaning supplies for the store.
22 Due to defects in the blades, Hus returned five pairs of the skates for a credit of $ 2,000 before applicable taxes.
31 Ashwin purchased on account an additional check-out counter for the store for $ 3,500 plus applicable taxes.
Instructions
Prepare the journal entries to record these transactions.
Exercise 14
Hockey Hus is located in Ontario with an HST rate of 13%. At the end of the quarter, Hockey Hus had the following balances in their HST accounts:
HST Recoverable $ 24,000
HST Payable $ 40,000
Instructions
Prepare the journal entry or entries related to their HST filing.
Exercise 15
Online Gennie is located in Manitoba and at the end of the quarter Online Gennie had the following balances in their GST and PST accounts:
GST Recoverable $ 48,000
GST Payable $ 80,000
PST Payable $ 30,000
Instructions
- Prepare the journal entry or entries related to their GST filing.
- Prepare the journal entry or entries related to their PST filing.
- For each of the above, indicate to whom payment if any should be made.
Exercise 16
Located in Saskatchewan, Watrous Resort at the end of the quarter had the following balances in their GST accounts:
GST Recoverable $ 22,000
GST Payable $ 56,000
Instructions
- Prepare the journal entry or entries related to their GST filing.
- Indicate to whom payment if any should be made.
Exercise 17
Located in Hope, British Columbia, Mountain View Restaurant and Gift Shop had the following balances in their GST and PST accounts at the end of the quarter:
GST Recoverable $ 45,000
GST Payable $ 83,000
PST Payable $ 27,000
Instructions
a) Prepare the journal entry or entries related to their GST filing.
b) Prepare the journal entry or entries related to their PST filing.
c) For each of the above, indicate to whom payment if any should be made.
Exercise 18
Located in PEI with an HST rate of 15%, Red Braids Hockey Hus had the following balances in their HST accounts at the end of the quarter:
HST Recoverable $ 68,000
HST Payable $ 105,500
Instructions
Prepare the journal entry or entries related to their HST filing.
Exercise 19
Claudex Camping Store uses a periodic inventory system and is located in Winnipeg, Manitoba where the PST rate is 8%. Claudex uses the earnings approach for revenue recognition. The following transactions took place in March:
Mar. 1 Paid rent of $ 2,500 plus PST and GST for March to the landlord.
5 Purchased $ 35,750 (plus applicable taxes) worth of camping equipment on account from Outdoor Comfort to stock up the store for the season.
9 A new laptop was purchased for the office to update their equipment. The price of the laptop was $ 1,250 plus taxes.
12 Returned $ 3,500 of camping goods to Outdoor Comfort.
18 Sold $ 5,300 plus applicable taxes of camping gear to Outdoor Adventures FOB shipping point n/30. The cost of the camping gear to Claudex was $ 2,200.
30 Received an invoice of $ 105 plus PST and GST from Bell MTS for telephone services for March.
30 Issued a cheque to the Receiver General for Canada for the quarterly remittance of GST. The GST Payable was $ 13,600 and the GST Recoverable $ 12,400 at the end of the quarter.
Instructions
Prepare the journal entries for the month of July. Do not round amounts.
Exercise 20
Ellie Smith is located in Gander Newfoundland and provides bookkeeping services to local businesses. The HST rate in her area is 15%. The following transactions took place in January:
Jan. 1 Purchased supplies of $ 1,500 plus applicable taxes.
5 Purchased new office furniture. The cost was $ 5,500 and the store added in applicable taxes to her bill which she paid in cash.
15 Invoiced Cod Cuts for bookkeeping services of $ 1,600 plus appropriate taxes.
19 Paid $ 350 to have the office copier repaired.
30 Collected the amount due from Cod Cuts.
31 Paid the quarterly remittance of HST to the Receiver General. The balance in the accounts consisted of HST Payable $ 12,350 and HST Recoverable of $ 1,885.
Instructions
Prepare the required journal entries. Do not round amounts.
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Accounting Principles Vol 1 8e Canadian Complete Test Bank
By Jerry J. Weygandt
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