Question

P10-1B On January 1, 2018, Burlington Inc.'s general ledger contained these opening balances for its liability accounts: Accounts payable $52,000 CPP payable 3,810 El payable 1,598 Sales tax payable 18,000 Employee income tax payable 7,700 Unearned revenue 16,000 The following selected transactions occurred during the month. Jan. 5 Sold inventory for cash totalling $20,000, plus 5% GST and 7% PST. The cost of goods sold was $14,000. Burlington uses a perpetual inventory system. 13 Paid $18,000 ($7,500 GST to the Receiver General and $10,500 PST to the provincial Minister of Finance) for sales taxes collected in December 14 Paid $13,108 to the Receiver General for amounts owing from the December payroll for the employee payroll deductions of $10.271 (CPP $1.905, EI $666, and employee income tax $7,700) and employee benefits of $2,837 (CPP $1,905 and EI $932) Borrowed $18,000 from HSBC Bank for three months, 6% interest is payable monthly on the 15th of each month. Provided services for customers who had made advance payments of $11,200. This amount includes applicable GST and PST, which is not payable until the related revenue is earned. Paid $32,000 to trade creditors on account. Received assessment of property taxes of $4,200 for the calendar year. They are payable on March 1. 29 Paid employees for the month. Gross salaries totalled $40,000 and payroll deductions included CPP of $1,980, EI of $752, and employee income tax of $9,474. Employee benefits included CPP of $1,980 and El of $1.053. Instructions (a) Record the above transactions. (b) Record any required adjusting entries at January 31. (c) Prepare the current liabilities section of the statement of financial position at January 31. 15 R

Answer 1

Answer The general ledger contained here opening balance Account payable = 52000 cpp payable - 3810 El payable = 1598 Sales Tax payable = 18000 Employee income payable=7700 Uncarned revenue = 16000 (a) The above transaction Jan-15 » Cash (Dr) = 22400 Sales (66) = 20000 sales tan payabl(o)- 1000 Sals tan payable (PST) (c) = 1400 Goods casting 14000 sold for 20000 Gst 25% PST = 7% on sales Jan 13 - Sales Tax payable (Dr) = 18000 Cash (c) = 18000

Jan = 14 CPP Payable ) - 3810 El payable (Dr) = 1598 Employee income tax payable = 7700 tax payable Dec payroll paid the receiver General Jan - 15 Cash (of 18000 HSBC Bank loan (c) = 18000 Bank for the months @ 60% interest payable monttely Jan - 19 - Unearned revenue = @r) =11200 Sales C = 10,000 sales tax payable GST (1x) = 500 sales tax payable PST (60) = 700 Jan-22 » Account payable Ao) =32000 - Cash (o) - 32000 Jan 28 - Salaries expense ( ) = 4000 Employee benefits Cpp (Dr) = 1980

Employee benefite fT = 1053 Cpp payable (C) = 3960 EI payable (cr) = 1805 Employu Income tax payable (x) = 94746 Cash (co) = 27794 o the required adjusting entries on January 31 Jan-3) - Property Tax Expense (Dr) - 350 Property tax payable (or) 2350 The payable march accured in the books Jan - 287 Interest expenses (fr) 2840 Interest payable (ed) = 540 (6) The current liabuties section of the statment of financial position January 31 Account Payable 220,000 cpp payable - 3960

ET Payable - 1805 Sales Tax payable - 3600 Employee Income Tax Puyable = 9474 Unearned Revenue = 4800 HSBC loan = 18000 Interest payable - 540 Property Tax payable ? 350 (20,000+ 3960 + 1805+ 3600 +9474t 4800 18000 + 540 +350) - 62 529 Total current liabilities = 62529 working notes Begingin Balance ) (o) Ending Balance Account payable 52000 32000 52000-32000 - 20 000 cpp payable 3810 3810 3960 - 3510 38 1020 = 3960 Account I

ET Payable Sales Tan payable 1598 18000 77000 1898 1805 18000 3600 77000 9474 1805 3600 9474 Employe income Tan Unearned Revenue 16000 11200 - 16000-11200 = 4800 HSBC loan 18000 18000 Interest payable 540 540 Property Tan payable 350 350