Question

Concord Corporation operates in the province of Ontario and sells merchandise on which HST must be charged at a rate of 13%. Concord uses a perpetual inventory system and has a calendar year end. Transactions for the business for the month of March are shown below: Mar. 1 Received an order from Franz Madolf for a specialty item not in stock. Due to the cost and nature of the item, Concord required Madolf to pay $1,000 in advance of the sale. 4 Received $1,000 cash from Madolf toward the order placed on March 1. 5 Sold merchandise on account and shipped merchandise to Skysong, Inc. for $23,000, plus HST with terms n/30, FOB shipping point. This merchandise cost Stratton $11,000. 30 Collected amount owing from Skysong. Partially correct answer iconYour answer is partially correct.

Prepare the journal entries to record the March transactions of Concord Corporation (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit Mar.

. Repeat part (a) assuming that Concord now operates in the province of British Columbia where PST is charged at the rate of 7% and GST is at the rate of 5%. Also assume that Concord has a perpetual inventory system. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Record journal entries in the order presented in the problem.

Answer 1

ANSWER:

1.

Date	Accounts titles and Explanation	Debit ($)	Credit ($)
Mar.1	No entry required
Mar.4	Cash	1,000
	Unearned Revenue		1,000
Mar.5	Accounts Receivable	25,990
	Sales Revenue		23,000
	HST Payable (23,000*13%)		2,990
	Cost of Goods Sold	11,000
	Merchandise Inventory		11,000
Mar.30	Cash	25,990
	Accounts Receivable		25,990

2.

Date	Accounts titles and Explanation	Debit ($)	Credit ($)
Mar.1	No entry required
Mar.4	Cash	1000
	Unearned Revenue		1000
Mar.5	Accounts Receivable	25,760
	Sales Revenue		23,000
	GST Payable (23,000*5%)		1,150
	PST Payable (23,000*7%)		1,610
	Cost of Goods Sold	11,000
	Merchandise Inventory		11,000
Mar.30	Cash	25,760
	Accounts Receivable		25,760