Question 1

 

As the chief accountant of The Furniture Shop, manufacturers of custom-made furniture for businesses, individuals and property developers of commercial and residential buildings, you are to complete the GST/HST return for the quarter-ended January 31, 2013.    The business began November 1, 2008 and is located in North York at 920 Caledonia Road, M6L 2W5.  The “BN” number is 763159255. The HST/GST return is due February 28, 2013 for reporting period November 1, 2012 to January 31, 2013.

 

Required:             a)            Complete the required GST return.

b)                   Prepare a computer spreadsheet showing how the balance in each line of the          

              GST return was calculated. Round all answers to the nearest cent.

c)             Prepare Journal entries to record each sales information transaction and the additional information items.

d)            Prepare the journal entry to record the payment (refund) of HST/GST due for the year.

 

 

Sales information: Invoice amount includes taxes. Assume customers are in Ontario unless otherwise noted.       

Invoice Date                         Invoice #               Customer Name                                                                  Invoice Amount

Nov.  01, 2012                       98                         Coppi Restaurant – tables / chairs                                                   $29,500

Nov.  3, 2012                          99                         Jonathan Blackwell, consumer sale                                                 1,958

Nov.  9, 2012                        100                         Cadillac Fairview – Office furniture                                                                13,280 

Nov.  15, 2012                     101                         Metis Indian Reserve – Cupboards                                                 9,760                                     

 

Dec. 1, 2012                       102                           Mary Smith, consumer sale (Halifax)                                             8,415

Dec. 4, 2012                       103                           Sale of used manufacturing equipment to consumer                  989

Dec. 16, 2012                       104                         Product sale to consumer, Washington Learning Centre             1,805 

Dec. 19, 2012                       Other                      Bad debt, Mary Smith (product value)                                           1,400     

Dec. 20, 2012                       105                         Edmonton Oilers Management, office desks (product value)    2,870

 

Jan.  07, 2013                      CN                          Returned goods (#98), (product value only)                                  1,680

Jan.  10, 2013                       106                         Marmor Property Management – Gift Certificate                        1,200                                    

Jan.  12, 2013                       107                         Canadian Auto Showroom – Wall units subject to 15%             7,200                     

                                                                                Volume discount (product value)                                                    

Jan.  22, 2013                       108                         Anna Li, re-sanding & re-finishing of consumer’s kitchen          1,930     

Jan.  28, 2013                       Other                    Recovery of a Prior bad debt                                                              615

 

 

Purchase information: Invoice amount excludes taxes if applicable.

Invoice Date                         Purchase Description                                                                                          Invoice Amount

Nov. 01, 2012                      Accounting fees                                                                                                                  $795

Nov. 07, 2012                      Rent for business location (Nov – Jan)                                                                           3,900

Nov. 08, 2012                      Computer purchased for office, 30% personal use                                                                      1,500

Nov. 09, 2012                      Parking expenses paid while visiting clients                                                                   30

Nov. 11, 2012                      Business Entertainment expenses (taxes included)                                                      428                                        

Nov. 19, 2012                      Loan interest expense                                                                                                         1,250

 

 

 

Purchase information: Invoice amount excludes taxes if applicable. (continued)

 

Invoice Date                         Purchase Description                                                          Invoice Amount (All applicable taxes excluded)

 

Dec. 01, 2012                       Purchase of goods for re-sale while on a business trip

                                                in Quebec; goods brought back to Ontario                                                                    2,500     

Dec. 05, 2012                       Coupon reimbursement to a Retailer                                                                              3,100 

Dec. 10, 2012                       Bell internet service bill                                                                                                       421

Dec. 15, 2012                       Wallanesa Insurance Brokers (Prepaid insurance for factory for year)                   10,000

Dec. 16, 2012                       Free cupboard samples for customers                                                                             1,685

Dec. 19, 2012                       Paid retailers for coupon reimbursement                                                                        925

 

Jan. 02, 2013                        Purchase of goods for re-sale from New York, USA

                                                (Purchase price in Can. $2,900, Assessed Cdn. Equivalent $2,850)

Jan. 03, 2013                        Courier services paid to send products to Ontario customer                                       419

Jan. 04, 2013                        Maintenance expenses – factory equipment                                                                 2,500

Jan. 15, 2013                        Cleaning services for factory and office                                                                         850

Jan. 21, 2013                        Purchase of Machinery, 55% business use                                                                     6,100     

 

Additional information:

  1. In January 2013, the CEO took a display cabinet to his home for personal use – product value was $1,800
  2. Installments of $1,100 were made to the CRA in November for HST.
  3. In January 2013, the CEO transferred a computer received as a gift from family to the business.  The original value of the computer was $1,300.  Current FMV is $1,200 (including taxes).

 

                                                               

Question 2                                                                  Fed. & Prov.

                                                Annual Salary                     Claim Code

Employee,  Jane Bowens                    $35,250.00                          to be determined

Employee,  Marco Scuttaro              $68,140.00                          to be determined 

               

 

Required—using the 2013 Payroll Deduction Guides that have been provided to you & the TD1 tax credit forms posted on blackboard:

 

1.  Calculate the Federal & Provincial tax credits based on the following information and determine the claim code     

     for income tax deduction purposes:  Show your calculations.

 

                                                Jane Bowens                                                                                        Marco Scuttaro

 

a)       Married; spouse has net income of $15,600                                                                Single, Age 39; supports 1 child age 9

b)       Jane’s age – 65, Spouse’s Age – 67                                                                Part time student, Seneca College, 6 months

c)       Non-government Pension income - $3,200                                                                                  Tuition fees $2,900

                                                                                                                                       

 

  1. Calculate gross pay, CPP deduction, EI deduction, Federal Taxes, Ontario Taxes for Jane & Marco for January 31, 2013.

       

  1. Pay Period type: Bi-weekly

                               

       4.      Prepare the payroll Journals by Employee & Total Company for the month of January.                  

        5.     Calculate the Payroll tax deductions (business & employee) that will be payable to CRA on  

                February 15, 2013.

 

 

        6.     Prepare the Journal Entries to record the payroll and the payroll withholdings tax payment to CRA.               

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