[16 Marks] Cheapies is a retail business situated in Ontario. All of its revenues occur and expenses are incurred in that province. It has no associated business and files its HST return on an annual basis. Ontario has a 13 percent HST. Cheapies Income Statement for the current year is as follows (all amounts are shown before applicable HST amounts): Revenues: Fully Taxable Goods $265,000 Exempt Services 73,000 $338,000 Less Expenses: ($140,000) Cost Of Goods Sold (All Taxable) Amortization Expense ( 23,000) Salaries And Wages ( 17,000) Rent ( 18,000) Interest Expense ( 50,000) Other Operating Expenses ( 21,000) ( 269,000) Income Before Taxes $ 69,000 Less: Federal And Provincial Income Taxes ( 14,000) Net Income $ 55,000 Other Information: 1. Inventories of taxable goods increased by $13,000 during the year. 2. A capital expenditure was made during the year at an HST inclusive cost of $62,150. The expenditure was for equipment that will be used 65 percent for the provision of fully taxable goods. HST was paid on the acquisition of all assets on which amortization is being taken during this period. 3. All of the Other Operating Expenses involved the acquisition of fully taxable supplies and were acquired to assist in the provision of fully taxable supplies. 4. The rent was not subject to HST as it was paid to a non-registrant. The proportion of the leased property that is used for the provision of exempt services is 30 percent. 5. Of the Salaries And Wages, 35 percent were paid to employees involved in providing exempt services. Required: A. [10 Marks] Calculate the net HST payable or refund that Cheapies will remit or receive for the current year using regular HST calculations. YOU MUST SHOW ALL YOUR WORK AND IT MUST BE PROPERLY LABELED. IF THERE IS NO INPUT TAX CREDIT FOR A PATICULAR ITEM, YOU STILL NEED TO INCLUDE IT IN YOUR ANSWER, AND NEXT TO ITS NAME PLEASE PUT NIL. B. [6 Marks] Calculate the net HST payable or refund that Cheapies will remit or receive for the current year using the Simplified Input Tax Credit Method. ITEMS FOR WHICH THERE ARE NO INPUT TAX CREDITS, NEED NOT BE INCLUDED IN THE ANSWER TO THIS PART OF THE QUESTION. YOUR ANSWER NEEDS TO BE PROPERLY LABELED