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Your friend, Malaya Claire, recently opened a retail shoe store. She knows she needs to pay sales tax but isn't sure how much. The GST

Your friend, Malaya Claire, recently opened a retail shoe store. She knows she needs to pay sales tax but isn't sure how much. The GST and PST are calculated by the cash register. The GST rate is 5% and the PST rate is 7%. Sales, before taxes, for the first month of operations based on the cash register reports were $125,000. Cost of goods sold is 50% of sales and a perpetual inventory system is used.

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(a) Calculate the amount of GST and PST. (b) Prepare the journal entry to record the sales and sales taxes, and cost of goods sold.

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