The following selected transactions occurred at Quayle Gardens during the year; sales taxes apply. Quayle Gardens uses the perpetual method to record inventory.
Jan. 10. Purchased Evergrow lights for use in the greenhouses on account from White Light Co., $190,000, terms n/30.
Feb. 5. Purchased plants with a value of $40,000 from Green Thumb, terms n/30.
9. Paid White Light Co. the amount owed.
Jun. 7. Sued White Light because two of the lights burst and burned the arm of an employee. The lawyer says Quayle Gardens will likely win the cost of the employee’s time off and compensation for mental distress, for a total of $30,000.
Jul. 15. Initiated a promotion for customers, whereby, if their plants die within three months of purchase, Quayle Gardens will reimburse the customer.
31. Total reimbursed to customers between July 15 and July 31 for the death of plants is $2,500 (use Miscellaneous Expense).
31. Quayle accrued another $4,000 for anticipated reimbursements for sales to July 31 (use Plant Replacement Liability).
Aug. 31. Total reimbursed to customers during the month is $3,200.
Instructions
Journalize the transactions with the following taxes.
a. GST of 5%
b. GST of 5% and PST of 7%
c. HST of 13%
d. GST of 5% and QST of 9.5%