(Regular And Simplified HST Returns) Adeedas Sports is a retail business located in Nova Scotia. All of its revenues occur and expenses are incurred in that province. It has no associated business and files its GST return on an annual basis. Nova Scotia has a 15 percent HST. Adeedas's Income Statement for the current year is as follows. All amounts are shown without the relevant HST. Revenues: Fully Taxable Goods $397,523 Exempt Services 109,564 $507,087 Less Expenses: Cost Of Goods Sold (All Taxable) ($ 201,372) Amortization Expense (34,784) Salaries And Wages ( 25,679) Rent (27,841) Interest Expense ( 75,964) Other Operating Expenses (31,478) ( 397,118) Income Before Taxes $109,969 Less: Federal And Provincial Income Taxes ( 21,489) Net Income $ 88,480 Other Information: 1. Inventories of taxable goods decreased by $19,561 during the year. 2. A capital expenditure was made during the year at an HST inclusive cost of $105,294. The expenditure was for equipment that will be used 60 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 20 percent. 5. Of the Salaries And Wages, 40 percent were paid to employees involved in providing exempt services. Required: A. Calculate the net HST payable or refund that Adeedas Sports will remit or receive for the current year using regular GST calculations. B. Calculate the net HST payable or refund that Adeedas Sports will remit or receive for the current year using the Simplified Input Tax Credit Method. (Regular And Simplified HST Returns) Adeedas Sports is a retail business located in Nova Scotia. All of its revenues occur and expenses are incurred in that province. It has no associated business and files its GST return on an annual basis. Nova Scotia has a 15 percent HST. Adeedas's Income Statement for the current year is as follows. All amounts are shown without the relevant HST. Revenues: Fully Taxable Goods $397,523 Exempt Services 109,564 $507,087 Less Expenses: Cost Of Goods Sold (All Taxable) ($ 201,372) Amortization Expense (34,784) Salaries And Wages ( 25,679) Rent (27,841) Interest Expense ( 75,964) Other Operating Expenses (31,478) ( 397,118) Income Before Taxes $109,969 Less: Federal And Provincial Income Taxes ( 21,489) Net Income $ 88,480 Other Information: 1. Inventories of taxable goods decreased by $19,561 during the year. 2. A capital expenditure was made during the year at an HST inclusive cost of $105,294. The expenditure was for equipment that will be used 60 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 20 percent. 5. Of the Salaries And Wages, 40 percent were paid to employees involved in providing exempt services. Required: A. Calculate the net HST payable or refund that Adeedas Sports will remit or receive for the current year using regular GST calculations. B. Calculate the net HST payable or refund that Adeedas Sports will remit or receive for the current year using the Simplified Input Tax Credit Method
