Question
Tamworth Industries operates in the province of Ontario, where the HST rate is 13%. Tamworth uses a perpetual inventory system. Transactions for the business in
Tamworth Industries operates in the province of Ontario, where the HST rate is 13%. Tamworth uses a perpetual inventory system. Transactions for the business in the month of November 2021 are shown below:
Nov 1 Paid November store rent to the landlord. Monthly rent payments are $4,800 plus HST.
Nov 14 Purchase merchandise inventory on account from various suppliers. The merchandise cost $2,300 plus HST.
Nov 17 Sold merchandise on account to various customers totaling $9.800 plus HST. The cost of the merchandise to Tamworth was $6,200.
Required:
- Prepare the journal entries to record these transactions on the books of Tamworth Industries.
- Calculate the balance in the HST Payable account at the end of March.
- Calculate the balance in the HST Recoverable account at the end of March.
- How much will Tamworth Industries owe to the Receiver General when they file their next HST return?
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