Question

Lisa Ltd lodges quarterly business activity statements with the taxation authority.

Narrations are not required for the following entries:

Required

1. Record the journal entries during the March 2019 quarter for sales $6600 (including GST) and inventory purchase $1210 (including GST). Note: Both sales and purchases are on account. Perpetual inventory system is applied.
2. What is the journal entry to discharge the GST liability?

Answer 1

Solution 1:

As GST rate is not given, let assume that GST rate is 10%

Lisa Ltd
Journal Entries
Event	Particulars	Debit	Credit
1	Accounts receivables Dr	$6,600.00
	To Sales revenue		$6,000.00
	To GST Payable		$600.00
	(To record sales on account)
2	Inventory Dr	$1,100.00
	GST recoverable Dr	$110.00
	To Accounts payable		$1,210.00
	(To record purchase on account)

Solution 2:

Lisa Ltd
Journal Entries
Event	Particulars	Debit	Credit
1	GST Payable Dr	$600.00
	To GST recoverable		$110.00
	To Cash		$490.00
	(To discharge GST Liability)