Monica's email deals with work troubles. She is the VP of Finance at X Ltd. (X Ltd. is also a client of your firm per Monica's recommendation.) Mrs. Partner has asked you to review Monica's two emails and provide her with the analysis and work she has asked us to complete.

Dear CPA, Re: Email 2 of 2- Monthly GST/HST Return for X Ltd.

The CFO who works for me is off with Covid and I need your help. As you know, X Ltd. files its GST/HST returns and makes any necessary remittances on a monthly basis. The accounting manager here has just prepared X Ltd.s HST return for February 2022 (Appendix 2) based on the G/L balances for HST payable and HST receivable. The CFO usually does a reasonability check on excel before I sign the return, but he is away until next week and the return is due tomorrow. Can you please do a reasonability check for me with some short explanations that I can put in the file?

Below are the figures that the CFO usually uses for his reasonability check:

X Ltd. had the following transactions in February 2022 (all transactions are in Ontario, all suppliers are registered for HST purposes and all figures are net of HST):

Sales (1) Cost of goods sold (2) Rent Salaries and wages Interest expense Other expenses (3) Purchases of furniture & equipment (4) Notes: $14,000,000 $ 8,000,000 $ 1,600,000 $ 2,500,000 $ 300,000 $ 1,750,000 $10,500,000 (1) $7.2 million were zero-rated items and the remainder were taxable supplies. (2) Purchases were $10 million, of which $4.2 million were zero-rated and the remaining amount were taxable supplies. (3) 100% were for taxable supplies and include golf club dues of $5,000 and meals and entertainment of $30,000. (4) At February 28, 2022, there was $3 million in accounts payable related to these purchases. Let me know if you need anything else and what corrections I need to make to the return. I appreciate your help. Monica Year 2 103 Appendix 2: X Ltd.'s GST/HST Return GST/HST Return Working Copy Do not use this working copy to file your return or to make payments at your financial institution Name Business number X Ltd 1234,5,6,7,8,9 RT 1 2 3 4 Reporting period Month Day Year Month Day Due date Year Month Day From 2 0 2 2 0 2 0 1 to 20 22 0 22 8 202 20331 Working copy (for your records) Copy your business number, the reporting period, and the amounts from the highlighted line numbers in this worksheet to the corresponding boxes in your GST/HST return. Enter your total sales and other revenue Do not include provincial sales tax, GST or HST. If you are using the quick method of accounting include the GST or HST 101 14,000,000,00 Net tax calculation Enter the total of all GST and HST amounts that you collected or that became collectible by you in the reporting period 884,000,00 Enter the total amount of adjustments to be added to the net tax for the reporting period (for example, the GST/HST obtained from the recovery of a bad debt) 104 Total GSTHST and adjustments for period (addlines 103 and 104) 105 884,000,00 Enter the GST/HST you paid or that is payable by you on qualifying expenses (input tax credits - ITCs) for the current period and any eligible unclaimed ITCs from a previous period 106 2,551,900100 Enter the total amount of adjustments to be deducted when determining the net tax for the reporting period (for example, the GST/HST included in a bad debt). 107 Total TCs and adjustments (add lines 106 and 107) 108 2,551,900,00 Net tax (subtract line 108 from ine 105) 109 - 1,667,900,00 Other credits if applicable Do not complete line 111 until you have read the instructions Enter any instalment and other annual filer payments you made for the reporting period 110 Enter the total amount of the GST/HST rebates only if the rebate form indicates that you can claim the amount on this line for filing information, see instructions 111 A A Total other credits (addines 110 and 111) A 112 Balance (subtract line 112 from line 109) 113 A - 1,667,900,00 Other debits if applicable Do not complete line 205 or line 405 until you have read the instructions Enter the total amount of the GST/HST due on purchases of real property or purchases of emission allowances Enter the total amount of other GST/HST to be self-assessed 205 405 Toral other debitsladd lines 205 and 405) 113 B Balance (add lines 113 A and 113 B) 113 C - 1,667,900,00 Refund claimed Payment enclosed Line 114 and line 115 If the result entered on line 113 C is a negative amount enter the amount of the refund you are claiming on line 114 Ir the result entered on line 113 C is a positive amount. enter the amount of your payment on line 115 114 1,667,900,00 115 Sales (1) Cost of goods sold (2) Rent Salaries and wages Interest expense Other expenses (3) Purchases of furniture & equipment (4) Notes: $14,000,000 $ 8,000,000 $ 1,600,000 $ 2,500,000 $ 300,000 $ 1,750,000 $10,500,000 (1) $7.2 million were zero-rated items and the remainder were taxable supplies. (2) Purchases were $10 million, of which $4.2 million were zero-rated and the remaining amount were taxable supplies. (3) 100% were for taxable supplies and include golf club dues of $5,000 and meals and entertainment of $30,000. (4) At February 28, 2022, there was $3 million in accounts payable related to these purchases. Let me know if you need anything else and what corrections I need to make to the return. I appreciate your help. Monica Year 2 103 Appendix 2: X Ltd.'s GST/HST Return GST/HST Return Working Copy Do not use this working copy to file your return or to make payments at your financial institution Name Business number X Ltd 1234,5,6,7,8,9 RT 1 2 3 4 Reporting period Month Day Year Month Day Due date Year Month Day From 2 0 2 2 0 2 0 1 to 20 22 0 22 8 202 20331 Working copy (for your records) Copy your business number, the reporting period, and the amounts from the highlighted line numbers in this worksheet to the corresponding boxes in your GST/HST return. Enter your total sales and other revenue Do not include provincial sales tax, GST or HST. If you are using the quick method of accounting include the GST or HST 101 14,000,000,00 Net tax calculation Enter the total of all GST and HST amounts that you collected or that became collectible by you in the reporting period 884,000,00 Enter the total amount of adjustments to be added to the net tax for the reporting period (for example, the GST/HST obtained from the recovery of a bad debt) 104 Total GSTHST and adjustments for period (addlines 103 and 104) 105 884,000,00 Enter the GST/HST you paid or that is payable by you on qualifying expenses (input tax credits - ITCs) for the current period and any eligible unclaimed ITCs from a previous period 106 2,551,900100 Enter the total amount of adjustments to be deducted when determining the net tax for the reporting period (for example, the GST/HST included in a bad debt). 107 Total TCs and adjustments (add lines 106 and 107) 108 2,551,900,00 Net tax (subtract line 108 from ine 105) 109 - 1,667,900,00 Other credits if applicable Do not complete line 111 until you have read the instructions Enter any instalment and other annual filer payments you made for the reporting period 110 Enter the total amount of the GST/HST rebates only if the rebate form indicates that you can claim the amount on this line for filing information, see instructions 111 A A Total other credits (addines 110 and 111) A 112 Balance (subtract line 112 from line 109) 113 A - 1,667,900,00 Other debits if applicable Do not complete line 205 or line 405 until you have read the instructions Enter the total amount of the GST/HST due on purchases of real property or purchases of emission allowances Enter the total amount of other GST/HST to be self-assessed 205 405 Toral other debitsladd lines 205 and 405) 113 B Balance (add lines 113 A and 113 B) 113 C - 1,667,900,00 Refund claimed Payment enclosed Line 114 and line 115 If the result entered on line 113 C is a negative amount enter the amount of the refund you are claiming on line 114 Ir the result entered on line 113 C is a positive amount. enter the amount of your payment on line 115 114 1,667,900,00 115