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Journalizing HST – General Journal: Ex. 5 p. 217 (t), p. 138-139 (w)

Journalizing HST – General Journal: Ex. 5 p. 217 (t), p. 138-139 (w). Journalize these transactions in a two-column general journal, using the accounts shown below. The rate for HST is 13%. The next page number in the journal is 7. Transactions. 4 Sales Invoice

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Journalizing HST – General Journal: Ex. 5 p. 217 (t), p. 138-139 (w)

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  1. Journalizing HST – General Journal: Ex. 5 p. 217 (t), p. 138-139 (w) Journalize these transactions in a two-column general journal, using the accounts shown below. The rate for HST is 13%. The next page number in the journal is 7.

  2. Transactions 4 Sales Invoice No. 571, to R. Chevrier for photo services, $275.00 plus HST of $35.75, total $310.75 What accounts are affected? • A/R- R. Chevrier will be debit (asset increase) • Fees Earned will be credit (Revenue increase) • HST Payable will be credit (collected from customer)

  3. Page 7 2012 Debit accounts Listed First

  4. 6 Purchase Invoice No. 7943, from Black’s Photo for photo supplies, $265.00 plus HST of 34.45, total $299.45 What accounts will be affected? • Photo Supplies will be debited (assets increase) • HST Recoverable will be debited (paid HST on asset) • A/P- Black’s Photo will be credited (purchased on account)

  5. Page 7 2012

  6. 9 Purchase Invoice No. 2332, from Jack’s Auto for regular maintenance of the company car, $175.00 plus HST of $22.75, total 197.75 What accounts will be affected? • Car Expense will be debited (expense increases) • HST recoverable will be debited (recover tax for business) • A/P- Jack’s Auto will be credited (paid on account)

  7. Page 7 2012

  8. 10 Cheque Copy No. 652, issued to the owner for his own use, $925.00 What accounts will be affected? • W. Seibert, drawings will be debited (owner’s equity decreases) • Bank will be credited (assets decreases)

  9. Page 7 2012

  10. 12 Cash Sales Slip No. 214, for photo work performed, $145.00, plus HST of $18.85, total $163.85 What accounts will be affected? • Bank will be debit (asset increases) • Fees earned will be credited (Revenue increases) • HST Payable will be credited (Collected from customer)

  11. Page 7 2012

  12. 15 Bank Debit Memo From Commercial Bank for bank service charges, $35.50, which are HST exempt What accounts will be affected? • Bank Charges Expense (expense increases) • Bank will be credited (asset decreases)

  13. Page 7 2012

  14. 22 Cash Receipt Remittance Slip No. 312, showing the receipt of $412.00 from H Walker on account. What accounts will be affected? • Bank will be debited (asset increases) • A/R- H. Walker will be credit (asset decreases)

  15. Page 8 2012

  16. 23 Memorandum From the owner stating that he had taken $75.00 of photo supplies for his personal work at home What accounts will be affected? • W. Siebert, Drawings will be debited (Drawings increases) • Photo Supplies will be credited (assets decrease)

  17. Page 8 2012

  18. 25 Cheque Copy No. 653, paying for the supplies purchased above on November 6. What accounts will be affected? • A/P- Black’s Photo will be debited (liabilities decreases) • Bank will be credited (assets decrease)

  19. Page 8 2012

  20. 28 Purchase Invoice No. 55521, received from Oakley Motors for body repairs on the business automobile, $750.00 plus HST of $97.50, total $847.50 What accounts will be affected? • Car expense will be debited (expenses increase) • HST Recoverable will be debited (pay HST) • A/P- Oakley Motors will be credited (liabilities increase)

  21. Page 8 2012

  22. Remittance • Now we must prepare to remit November’s HST to Canada Revenue Agency (CRA) • Calculate Wayne Siebert’s total HST Payable & HST Recoverable HST Recoverable HST Payable DR CR CR DR (2 ) 34.45 35.75 (1) (3 ) 22.75 18.85 (5) ( 10) 97.50 54.60 154.70

  23. Clearing an account balance • This means to bring the account to zero. Bank HST Recoverable HST Payable CR DR DR DR CR CR ( ) 34.45 154.70 35.75 ( 54.60 ( ) 22.75 18.85 ( ( ) 97.50 54.60 54.60 100.10 154.70 154.70 0 0

  24. A typical HST remittance journal entry

  25. Wayne Siebert Photography Balance Sheet December 31, 2012 (pay the next month) Liabilities (SECTION ONLY) Bank Loan XXXXX Accounts Payable XXXXX HST Payable $54.60 Less: HST Recoverable 154.70 Refund 100.10 Total Liabilities XXXXX

  26. If HST Payable is greater than HST Recoverable Wayne Siebert Photography Balance Sheet December 31, 2012 (pay the next month) Liabilities (SECTION ONLY) Bank Loan XXXXX Accounts Payable XXXXX HST Payable $154.60 Less: HST Recoverable 54.50 Remittance100.10 Total LiabilitiesXXXXX

  27. Start Exercise #6A p. 218-219 (t), p. 140-141 (w)

  28. Complete Ex. 6A p. 218-219 (t), p. 140-141 (w) • Switch with a classmate when done & correct • Use a pen for errors • Put both names on it (identify who did what) • Give a mark out of 10 & hand in • Read 7.1 – Posting p. 228-232 (t) & define the following terms: Posting, Cross-referencing & Forwarding

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