Question A: Accounting for Sales Revenue and Receivables (10 marks: 16 minutes) Office Solutions, Inc. sells copiers, printers, laptops, tablets and other types of office equipment. During January 2021, the following transactions occurred January 10 - Purchased five printers on account from Tsang Inc at a cost of $200 each. The credit terms are 1/10, 1/30 January 17 - Sold four printers on account to Mytko & Sons, Ltd. for $400 per printer. The credit terms are 2/10, 1/30 January 19 - Paid the amount due to Tsang Inc. January 21- One of the printers sold to Mytko & Sons Ltd. was found to be different from what Mytko ordered and was returned to Office Solutions for full credit. January 23 - Office Solutions returned a printer to Tsang Inc and was promised a refund for the amount paid January 26 - Received the amount due from Mylko & Sons Ltd. Required: 1. Prepare the journal entries to record the transactions that occurred on January 17, 19, 21 and 26 in the accounting records of Office Solutions. The company uses a perpetual inventory system mit narrative explanations (8.5 marks) 2. Assume that Office Solutions Inc. did not have enough cash to pay the amount due to Tsang Inc. on January 19, but could have borrowed the required amount from the local bank at an annual interest rate of 15%. Should the company borrow the required amount from the bank to pay Tsang Inc on January 19? Explain. (1.5 marks) Notes Question 1 Notes Maria Question B: Accounting for Selected Transactions (8 marks: 14 minutes) Robert ind is a retail company selling technology products online. Robert's fiscal year end is December 31 Below is selected information about Robert's operations during 2021 1. During March, Robert sold 200 units of one of its technology products at $200 each subject to provincial sales tax of 8% of the sales price, and goods and services tax of 5% Marks Question B: Accounting for Selected Transactions (8 marks: 14 minutes) Robert Inc. is a retail company selling technology products online, Robert's fiscal year end is December 31. Below is selected information about Robert's operations during 2021. 1. During March, Robert sold 200 units of one of its technology products at $200 each, subject to provincial sales tax of 8% of the sales price, and goods and services tax of 5% of the sales price. Customers paid for their purchases using either MasterCard or Visa, that both charge Robert Inc. a fee of 2% for their service, Each unit carries a one-year warranty. Robert promises to repair the unit should it become defective. The estimated cost to the company to honour the warranty is $30 per unit and experience has shown that approximately 7% of all units may have to be repaired during the warranty period. Required Prepare journal entries to record (1) sales during the first quarter of 2021 and (2) the associated warranty expense. (5 marks) 2 The payroll register for February 2021 showed the following totals. Salaries were paid on February 28 Gross balaries $19,500 Income taxes withheld 4,200 Quebec Pension Plan (OPP) withheld 975 Private medical insurance deductions 675 Employment insurance (EI) withheld 448 Union dues withheld 324 COLLIVECHAT HELP Required: a. How much cash did Robert Inc. pay to the employees on February 28? (1 mark) b. What is the total compensation expense that should be recorded on Robert Inc.'s books for February 28, assuming that the employer is required to pay a matching amount of the QPP deductions and 1.40 times the El deductions? (2 marks) Notes
