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

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 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)

Account Title & ExplanationPR

Nov 4 A/R- R. Chevrier 3 1 0 75 Fees Earned 2 7 5 - HST Payable 3 5 75To record sale on account

Date Debit Credit

Page 72012

Debit accounts Listed First

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)

Account Title & ExplanationPR

Nov 4 A/R- R. Chevrier 3 1 0 75 Fees Earned 2 7 5 - HST Payable 3 5 75To record sale on account

6 Photo Supplies 2 6 5 -HST Recoverable 3 4 45 A/P- Black's Photo 2 9 9 45To record purchase of supplies on account

Date Debit Credit

Page 72012

9 Purchase InvoiceNo. 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)

Account Title & ExplanationPR

Nov 4 A/R- R. Chevrier 3 1 0 75 Fees Earned 2 7 5 - HST Payable 3 5 75To record sale on account

6 Photo Supplies 2 6 5 -HST Recoverable 3 4 45 A/P- Black's Photo 2 9 9 45To record purchase of supplies on account

9 Car Expense 1 7 5 -HST Recoverable 2 2 75 A/P- Jack's Auto 1 9 7 75To record car expense on account

Date Debit Credit

Page 72012

10 Cheque CopyNo. 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)

Account Title & ExplanationPR

10 W. Siebert, Drawings 9 2 5 - Bank 9 2 5 -To record owner withdrawal

Date Debit Credit

Page 72012

12 Cash Sales SlipNo. 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)

Account Title & ExplanationPR

10 W. Siebert, Drawings 9 2 5 - Bank 9 2 5 -To record owner withdrawal

12 Bank 1 6 3 85 Fees Earned 1 4 5 - HST Payable 1 8 85To record sale for cash

Date Debit Credit

Page 72012

15 Bank Debit MemoFrom 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)

Account Title & ExplanationPR

10 W. Siebert, Drawings 9 2 5 - Bank 9 2 5 -To record owner withdrawal

12 Bank 1 6 3 85 Fees Earned 1 4 5 - HST Payable 1 8 85To record sale for cash

15 Bank Charges Expense 3 5 50 Bank 3 5 50To record bank service charges

Date Debit Credit

Page 72012

22 Cash ReceiptRemittance 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)

Account Title & ExplanationPR

Nov 22 Bank 4 1 2 - A/R- H. Walker 4 1 2 -To record payment received from H. Walker

Date Debit Credit

Page 82012

23 MemorandumFrom 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)

Account Title & ExplanationPR

Nov 22 Bank 4 1 2 - A/R- H. Walker 4 1 2 -To record payment received from H. Walker

23 W. Siebert, Drawings 7 5 - Photo supplies 7 5 -To record photo supplies taken by owner

Date Debit Credit

Page 82012

25 Cheque CopyNo. 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)

Account Title & ExplanationPR

Nov 22 Bank 4 1 2 - A/R- H. Walker 4 1 2 -To record payment received from H. Walker

23 W. Siebert, Drawings 7 5 - Photo supplies 7 5 -To record photo supplies taken by owner

25 A/P- Black's Photo 2 9 9 45 Bank 2 9 9 45To record payment to A/P- Black's Photo

Date Debit Credit

Page 82012

28 Purchase InvoiceNo. 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)

Account Title & ExplanationPR

Nov 22 Bank 4 1 2 - A/R- H. Walker 4 1 2 -To record payment received from H. Walker

23 W. Siebert, Drawings 7 5 - Photo supplies 7 5 -To record photo supplies taken by owner

25 A/P- Black's Photo 2 9 9 45 Bank 2 9 9 45To record payment to A/P- Black's Photo

28 Car Expense 7 5 0 -HST Recoverable 9 7 50 A/P- Oakley Motors 8 4 7 50

Date Debit Credit

Page 82012

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 Payable HST Recoverable

DR CR DR CR

35.75 (1)18.85 (5)54.60

(2 ) 34.45 (3 ) 22.75 ( 10) 97.50

154.70

Clearing an account balance

• This means to bring the account to zero.

HST PayableDR CR

35.75 (18.85 (54.60

HST Recoverable

DR CR( ) 34.45 ( ) 22.75 ( ) 97.50

154.70

BankDR CR

54.60

0 154.70

0

154.70 54.60

100.10

A typical HST remittance journal entry

Account Title & ExplanationPR

Dec 31 HST Payable 5 4 60Bank 1 0 0 10 HST Recoverable 1 5 4 70To record HST refund

Date Debit Credit

Wayne Siebert PhotographyBalance Sheet

December 31, 2012 (pay the next month)

Liabilities (SECTION ONLY)Bank Loan XXXXXAccounts Payable XXXXXHST Payable $54.60Less: HST Recoverable 154.70Refund 100.10Total Liabilities XXXXX

If HST Payable is greater than HST Recoverable

Wayne Siebert PhotographyBalance Sheet

December 31, 2012 (pay the next month)

Liabilities (SECTION ONLY)Bank Loan XXXXXAccounts Payable XXXXXHST Payable $154.60Less: HST Recoverable 54.50Remittance 100.10Total Liabilities XXXXX

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

• 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