50.1K

Verified Solution

Link Copied!

Modern Electronics Company purchases merchandise inventory from several suppliers. On April 1, 2017, Modern Electronics purchased from Speedy Supplies $80,000 of inventory on account. On May 15, 2017, Modern Electronics sold inventory to a Jones Apartment Complex for $60,000 cash, which included $50,000 COGS for the inventory. On June 15, 2017 Modern Electronics remitted the applicable PST and GST or HST. Use the PST, GST and HST rates in Exhibit 10.6.

Required: Journalize Modern Electronics Company transactions on April 1, 2017, May 15, 2017 and June 15, 2017, including applicable PST and GST or HST assuming it is located in: (Round the final answer to 2 decimal places.)

a. Ontario b. British Columbia c. Alberta

Part a. Modern Electronics is located in Ontario

1.Record the purchase of inventory on credit plus applicable ITC.

2.Record the cash sales plus applicable Sales tax.

3.Record the cost of sales.

4.Record the refund of applicable Sales tax from Receiver General for Canada.

Part b. Modern Electronics is located in British Columbia

1.Record the purchase of inventory on credit plus applicable ITC.

2.Record the cash sales plus applicable Sales tax.

3.Record the cost of sales.

4.Record the refund of applicable Sales tax from Receiver General for Canada.

5.Record the remittance of PST to provincial authorityBC Ministry of Finance.

Part c. Modern Electronics is located in Alberta

1.Record the purchase of inventory on credit plus applicable ITC.

2.Record the cash sales plus applicable Sales tax.

3.Record the cost of sales.

4.Record the refund of applicable Sales tax from Receiver General for Canada.

Ex. 10

PST Rate GST Rate HST Rate Regions with GST Only Alberta 5% 5% 5% 5% Nunavut Yukon Regions with GST and PST British Columbia 7% 8% q.q75% 5% 5% 5% 5% 5% Quebec Regions with HST New Brunswick 13% 15% 15% 13% 14% Nova Scotia Prince Edward Island *A Harmonized Sales Tax (HST) is applied in place of PST and GST. HST is the combination of the PST with the GST for a total sales tax. For example, for both New Brunswick and Ontario the PST rate of 8% is combined with the GST of 5%, resulting in an overall HST of 13% **The Newfoundland 2015 budget announced that the rate increases from 13% to 15%, effective January 1, 2016

Answer & Explanation Solved by verified expert

See Answer