Question

The following are selected transactions of Blue Spruce Department Store Ltd. for the current year ended December 31. Blue Spruce 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.

1.		On February 2, Blue Spruce placed an order to buy goods for resale from Hashmani Limited for $49,000 plus GST. Terms of purchase are f.o.b. destination, net 15. The goods arrived February 6 and the invoice was paid on February 20. (Hint: Inventory for resale is purchased PST exempt.)
2.		On April 1, Blue Spruce purchased a truck for $49,000 from Schuler Motors Limited, paying $11,270 cash and signing a one-year, 8% note for the balance of the purchase price. Provincial sales tax of 8% and GST of 5% were charged by the supplier on the purchase price.
3.		On May 1, Blue Spruce borrowed $73,000 from First Provincial Bank by signing a $82,900 non–interest-bearing note due one year from May 1.
4.		On June 30 and December 31, Blue Spruce remitted cheques for $20,200 each as instalments on its current year tax liability.
5.		On August 14, Blue Spruce's board of directors declared a $19,000 cash dividend that was payable on September 10 to shareholders of record on August 31.
6.		On December 5, Blue Spruce received $1,700 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, Blue Spruce purchased new furniture and fixtures for $8,000 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 $80,000 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.
9.		Blue Spruce’s lease for its store premises calls for a $2,800 monthly rental payment plus 3% of net sales. The payment is due one week after month end.
10.		Blue Spruce was advised during the month of December that it is legally required to restore the area (considered a land improvement) surrounding one of its new store parking lots, when the store is closed in 12 years. Blue Spruce estimates that the fair value of this obligation at December 31 is $93,000.
11.		The corporate tax return indicated taxable income of $206,200. Blue Spruce’s income tax rate is 20%.

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.

Identify the current liabilities that will be reported on Blue Spruce's December 31 SFP, and indicate the amount of each one.

Blue Spruce Department Store Ltd. Balance Sheet (Partial) December 31
Intangible AssetsShort-Term InvestmentsTotal Current LiabilitiesTotal Intangible AssetsLong-Term InvestmentsTotal AssetsCurrent LiabilitiesTotal Liabilities and Shareholders' EquityTotal Property, Plant and EquipmentTotal Current AssetsProperty, Plant and EquipmentCurrent AssetsTotal Shareholders' EquityShareholders' Equity
Notes ReceivableRent PayableRefund LiabilityNotes Payable (Schuler Motors Ltd.)Interest ReceivableAccounts ReceivableSales Tax PayableRent ReceivableInterest PayableGST PayableNotes Payable (First Provincial Bank)CashGST ReceivableIncome Tax ReceivableIncome Tax PayableAccounts Payable		$
CashIncome Tax PayableSales Tax PayableAccounts ReceivableRent PayableNotes Payable (Schuler Motors Ltd.)Income Tax ReceivableGST ReceivableInterest PayableNotes Payable (First Provincial Bank)Notes ReceivableInterest ReceivableRent ReceivableRefund LiabilityAccounts PayableGST Payable
Refund LiabilityNotes Payable (Schuler Motors Ltd.)Income Tax PayableNotes Payable (First Provincial Bank)Interest PayableSales Tax PayableInterest ReceivableIncome Tax ReceivableGST ReceivableCashRent ReceivableAccounts ReceivableGST PayableAccounts PayableNotes ReceivableRent Payable
Interest ReceivableGST ReceivableInterest PayableIncome Tax PayableSales Tax PayableNotes Payable (Schuler Motors Ltd.)Notes ReceivableRent PayableIncome Tax ReceivableNotes Payable (First Provincial Bank)Accounts ReceivableRefund LiabilityGST PayableAccounts PayableCashRent Receivable
GST PayableCashNotes ReceivableNotes Payable (First Provincial Bank)Income Tax PayableNotes Payable (Schuler Motors Ltd.)Income Tax ReceivableAccounts ReceivableInterest ReceivableSales Tax PayableAccounts PayableRefund LiabilityRent ReceivableRent PayableInterest PayableGST Receivable
Income Tax PayableAccounts ReceivableNotes ReceivableRefund LiabilityAccounts PayableNotes Payable (First Provincial Bank)Interest ReceivableCashGST ReceivableIncome Tax ReceivableRent ReceivableRent PayableGST PayableSales Tax PayableInterest PayableNotes Payable (Schuler Motors Ltd.)
Accounts ReceivableSales Tax PayableInterest PayableCashInterest ReceivableRent ReceivableNotes Payable (First Provincial Bank)Notes ReceivableRefund LiabilityGST PayableIncome Tax ReceivableIncome Tax PayableRent PayableGST ReceivableAccounts PayableNotes Payable (Schuler Motors Ltd.)
Refund LiabilityGST ReceivableInterest ReceivableIncome Tax PayableGST PayableSales Tax PayableCashInterest PayableNotes Payable (Schuler Motors Ltd.)Rent ReceivableAccounts ReceivableRent PayableNotes Payable (First Provincial Bank)Accounts PayableNotes ReceivableIncome Tax Receivable
Current LiabilitiesTotal Current LiabilitiesLong-Term InvestmentsTotal Liabilities and Shareholders' EquityTotal Current AssetsTotal Shareholders' EquityTotal AssetsProperty, Plant and EquipmentShareholders' EquityShort-Term InvestmentsTotal Property, Plant and EquipmentTotal Intangible AssetsIntangible AssetsCurrent Assets		$

Answer 1

S.No	Date	Particulars	Debit ($)	Credit($)
1	06-Feb	Purchases a/c	49000
		Input GST a/c	2450		W.No-1
		To Hasmani Ltd		51450
		(Being goods purchased for resale)
	Goods are accounted at the time of entry
	20-Feb	Hasmani Ltd a/c	51450
		To Cash/Bank		51450
		(Being payment made)
2	01-Apr	Truck a/c	49000
		Input GST a/c	2450		W.No-2
		input PST a/c	3920		W.No-2
		To cash		11270
		To Schler Motors Ltd		44100	W.No-2
		(Being truck purchased)
3	01-May	Cash a/c	73000
		To First provincial bank		73000
		(Being amount borrowed from bank)
4	30-Jun	tax Liablity a/c	20200
		To Bank		20200
		(Being cheques given for income tax)
	31-Dec	tax Liablity a/c	20200
		To Bank		20200
		(Being cheques given for income tax)
5	14-Aug	Dividend a/c	19000
		To Dividend Payble		19000
		(Being Dividend declared)
	10-Sep	Dividend Payable a/c	19000
		To cash		19000
		(Being dividend paid)
6	05-Dec	Cash/bank a/c	1700
		To Refund Liablity		1700
		(Being amount recived from jefferson for a deposit on trailer)
7	10-Dec	Furniture & Fixture a/c	8000
		Input GST	400		W.No-3
		Input PST	640		W.No-3
		To Supplier a/c		9040	W.No-3
		(Being purchase of Furniture & Fixture )
8	31-Dec	Accounts Recivable a/c	90400
		To Sales		80000	W.No-4
		To Output Gst		4000	W.No-4
		To Output PST		6400	W.No-4
		(Being cash sales made but payment in next month,so recorded as credit sales)
9	31-Dec	Rent a/c	36000		W.No-5
		To Rent Payable a/c		36000
		(Being rent incurred on lease)
10	31-Dec	No transaction occurred so no entry
11	31-Dec	Income tax a/c	41240		W.No-6
		To Tax Payable a/c		41240
		(Being tax incurred on taxable income)

Working Note-1	Caluculate Input GST	Amount($)
	Purchase value	49000
	GST-5%	2450
Working Note-2	Particulars	Amount($)
	Purchase value	49000
	GST-5%	2450
	PST-8%	3920
	Less cash paid	-11270
	Due to supplier	44100
Working Note-3	Furniture & Fixtures	Amount($)
	Purchase value	8000
	GST-5%	400
	PST-8%	640
	Due to supplier	9040
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