Question

The Toy House Lid (Toy Harter of games and toys AS GST bed where the On October 1toy House purchased 5.000 of merchandise from old and White Corporation for cash What is the Journal ostry required by loy Debt Merchandise vertory 5.000 Credit Cash $5.000 O Debt Merchandise nemory $5.250 Cred Cash $5.250 Debt Merchandise or 55.000 DE GST Recebe $250 Credit Cash $5,250 O Debit Merchandise intory 5.260. Crede OST Payable $250 Credit Cah S6000

Answer 1

Debit Merchandise Inventory $5,000, Debit GST Receivable $250 credit cash $5,250

Purchase merchandise	$5,000
GST receivable ($5,000 x 5%)	$250
Cash paid to the supplier	$5,250
Note: As 5% GST must be applied where applicable, so on purchase
of merchandise, there should be 5% GST receivable which is paid to
supplier at the time of purchase of merchandise.