Carla Vista Company is a retailer operating in the province of Ontario, where HST is 13%. Carla Vista uses a periodic inventory system. Transactions for the business are shown below: Nov. 1 Paid November store rent to the landlord. The lease calls for monthly payments of $6,700 before taxes. 4 Purchased merchandise for resale on account from Comet Industries. The merchandise cost $8,300 plus applicable tax. 6 Returned $600 of merchandise to Comet Industries. 7 Sold merchandise on account to Solar Star Company for $13,000 plus applicable sales taxes, terms, n/30, FOB shipping point. The merchandise was shipped to Solar Star. The cost of the merchandise to Carla Vista was $6,000. 12 Purchased a new laptop computer at Staples for the marketing manager. The price of the laptop was $1,200 before applicable taxes. 30 Paid the quarterly remittance of HST to the Receiver General. The balances in the accounts were as follows: HST Payable $2,660 and HST Recoverable $990. Prepare the journal entries to record these transactions on the books of Carla Vista. Assume that the GST balances on Nov. 30 provided are the balances in the HST accounts.
The Effect Of Prepaid Taxes On Assets And Liabilities
Many businesses estimate tax liability and make payments throughout the year (often quarterly). When a company overestimates its tax liability, this results in the business paying a prepaid tax. Prepaid taxes will be reversed within one year but can result in prepaid assets and liabilities.
Final Accounts
Financial accounting is one of the branches of accounting in which the transactions arising in the business over a particular period are recorded.
Ledger Posting
A ledger is an account that provides information on all the transactions that have taken place during a particular period. It is also known as General Ledger. For example, your bank account statement is a general ledger that gives information about the amount paid/debited or received/ credited from your bank account over some time.
Trial Balance and Final Accounts
In accounting we start with recording transaction with journal entries then we make separate ledger account for each type of transaction. It is very necessary to check and verify that the transaction transferred to ledgers from the journal are accurately recorded or not. Trial balance helps in this. Trial balance helps to check the accuracy of posting the ledger accounts. It helps the accountant to assist in preparing final accounts. It also helps the accountant to check whether all the debits and credits of items are recorded and posted accurately. Like in a balance sheet debit and credit side should be equal, similarly in trial balance debit balance and credit balance should tally.
Adjustment Entries
At the end of every accounting period Adjustment Entries are made in order to adjust the accounts precisely replicate the expenses and revenue of the current period. It is also known as end of period adjustment. It can also be referred as financial reporting that corrects the errors made previously in the accounting period. The basic characteristics of every adjustment entry is that it affects at least one real account and one nominal account.
Carla Vista Company is a retailer operating in the province of Ontario, where HST is 13%. Carla Vista uses a periodic inventory system. Transactions for the business are shown below:
| Nov. | 1 | Paid November store rent to the landlord. The lease calls for monthly payments of $6,700 before taxes. | ||
| 4 | Purchased merchandise for resale on account from Comet Industries. The merchandise cost $8,300 plus applicable tax. | |||
| 6 | Returned $600 of merchandise to Comet Industries. | |||
| 7 | Sold merchandise on account to Solar Star Company for $13,000 plus applicable sales taxes, terms, n/30, FOB shipping point. The merchandise was shipped to Solar Star. The cost of the merchandise to Carla Vista was $6,000. | |||
| 12 | Purchased a new laptop computer at Staples for the marketing manager. The price of the laptop was $1,200 before applicable taxes. | |||
| 30 | Paid the quarterly remittance of HST to the Receiver General. The balances in the accounts were as follows: HST Payable $2,660 and HST Recoverable $990. |
Prepare the
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
