Question

Sunland Wholesalers Ltd. has a December 31 year end. The company incurred the following transactions related to current liabilities:

1.		Sunland’s cash register showed the following totals at the end of the day on March 17: pre-tax sales $58,000, GST $2,900, and PST $4,060.
2.		Sunland remitted $49,000 of sales taxes owing from March to the government on April 30.
3.		Sunland received its property tax bill for the calendar year for $78,000 on March 31, payable May 31. Sunland recorded no entries pertaining to property tax during the current year prior to the receipt of this bill.
4.		Sunland paid its employees for the week of August 15 on August 20. The gross pay was $80,000. The company deducted $4,128 for CPP, $1,312 for EI, $6,100 for pension, and $16,020 for income tax from the employees’ pay.
5.		Sunland recorded the employer portions of CPP and EI for the week of August 15 on August 20 for $4,128 and $1,837, respectively.
6.		On September 15, all amounts owing for employee income taxes, CPP, and EI pertaining to the payroll transactions above were paid.
7.		On December 31, Sunland’s legal counsel believes that the company will have to pay damages of $40,000 next year to a local utility company for failing to pay it on time during the current year.
		(Hint: This will affect the Utilities Expense account.)

(a)

New attempt is in progress. Some of the new entries may impact the last attempt grading. Your answer is partially correct.

Record journal entries for the transactions above. (Round answers to the nearest whole dollar, e.g. 5,275. Record journal entries in the order presented in the problem. Credit account titles are automatically indented when the amount is entered. Do not indent manually. List all debit entries before credit entries.)

Date	Account Titles and Explanation	Debit	Credit

eTextbook and Media

Answer 1

Date	Accounts Titles	Debit	Credit
17-Mar	Cash	64960
	Pre tax sales		58000
	GST payable		2900
	PST payable		4060
30-Apr	Cash	49000
	sale tax payable		49000
31-May	Property tax(current year ) (march 31 - dec 31)	58500
	Property prepaid expense ) (Jan 1 - march 31)	19500
	property tax payable		78000
20-Aug	Salaries	27571
	CPP payable		4128
	EI payable		1323
	Pension payable		6100
	Income tax payable		16020
20-Aug	Payroll tax expense	5965
	CPP payable		4128
	EI payable		1837
15-Sep	CPP payable	8256
	EI payable	3160
	Income tax payable	16020
	Cash		27436
	Adjusting entry for paying damages of $40,000
31-Dec	Utilities Expenses	40000
	Utilities payable		40000