Question

The following are selected transactions of Grouper Department Store Ltd. for the current year ended December 31. Grouper is a private company operating in the province of Manitoba where PST is 8% and GST is 5%. PDSL follows ASPE and has a periodic inventory system.

6.On December 5, Grouper received $1,400 from Jefferson Ltd. as a deposit on a trailer that Jefferson is using for an office move. The deposit is to be returned to Jefferson after it returns the trailer in good condition on January 15. (Hint: Use the account Refund Liability.)

7.On December 10, Grouper purchased new furniture and fixtures for $10,000 on account. Provincial sales tax of 8% and GST of 5% were charged by the supplier on the purchase price.

8.During December, cash sales of $83,000 were recorded, plus 8% provincial sales tax and 5% GST that must be remitted by the 15th day of the following month. Both taxes are levied on the sale amount to the customer. Ignore any cost of goods sold.

Prepare all the journal entries necessary to record the above transactions when they occurred and any adjusting journal entries relative to the transactions that would be required to present financial statements at December 31 in accordance with GAAP.

Answer 1

Cash $ 1400 Deposit Received $ 1400 ㅋ 7 Furniture 10ooo AST 5% Soo PST 8% 800 Account Payable $ 11300 Cash $ 93,790 Sales Revenue 83000 AST 5%. Payable 4150 PS7 8%. Payable $ 8