Problem 10-7B Sales taxes payable (17 marks)

Appleton Electronics Company purchases merchandise inventory from several suppliers.On October 1, 2020, Appleton Electronics purchased from Digital Wiring $40,000 of inventory on account.On November 10, 2020, Appleton Electronics sold inventory to Disco Sound Company for $16,000 cash, which included $10,000 COGS for the inventory.On December 15, 2020 Appleton Electronics remitted the applicable PST and GST.

Required

Journalize Appleton Electronics Company transactions on October 1, 2020, November 10, 2020 and December 15, 2020, including PST and GST assuming it is located in Saskatchewan. (Use the PST, GST and HST rates in Exhibit 10.6)

CHAPTER 10 Current Liabilities Provincial Sales Tax (PST) Provincial Sales Tax (PST) is a tax applied on sales to the final consumers of products. This means th business does not incur PST on its purchases. PST is calculated as a percentage of the sale price of the being sold. PST percentages vary across the country, as detailed in Exhibit 10.6. British Columbia, Mani, Quebec, and Saskatchewan require retailers to collect PST from their customers and to forward this tax odically to the appropriate provincial authority. EXHIBIT 10.6 Sales Tax Rates, Effective January 1, 2018 PST Rate GST Rate HST Rate" Regions with GST Only Alberta. -0- 5% Northwest Territories... -0- 5% Nunavut.. -0- 5% Yukon.... - 0- 5% Regions with GST and PST British Columbia.. 7% 5% Manitoba.. 8%*. 5% Quebec .... 9.975% 5% Saskatchewan .... 6% 5% 1 1 Regions with HST New Brunswick*"* 15% Newfoundland and Labrador"". - - 15% Nova Scotia.. Ontario .. 1 1 - 1 1 15% 13% Prince Edward Island.". 15% "A Harmonized Sales Tax (HST) is applied in place of PST and GST. HST is the combination of the PST with the GST for a total sales tax. For example, for both New Brunswick and Ontario the PST rate of 8% is combined with the GST of 5%, resulting in an overall HST of 13%. "Referred to as Retail Sales Tax (RST). ."Rates increased to 15% effective 2016. o demonstrate, assume that Z Galleria Furniture, located in Kelowna, British Columbia, is hold furnishings. Z Galleria purchases merchandise inventory from several manufacture ndustries. Because Z Galleria is not the final consumer, it does not pay PST on purchase ndustries and its other suppliers. Customers purchasing from Z Galleria Furniture are and will therefore pay the applicable PST. Idea Furniture is required to collect and remit s to its customers. If Z Galleria Furniture's total cash sales on July 14, 2020, were $16,000 ), the company would record the following entry (assuming a perpetual inventory system 2020 July 14 Cash ........... 17,120 Furniture Sales ... 16,000 PST Payable .... 1,120 To record cash sales plus applicable PST; $16,000 X 7% = $1,120. BAH GHA EJS 14 Cost of Goods Sold..............:14:4:4:"." 12,000 12,00 Merchandise Inventory..41454..... To record cost of sales