Select Transactions and Other Information Pertaining to the Best Place

question 8

Essay

Select transactions and other information pertaining to the Best Place in the World Inc.(BPW)are detailed below.
Facts:
a.BPW is domiciled in Vancouver,British Columbia and all purchases and sales are made in BC.
b.The HST rate in British Columbia is 12%.
c.The balances in BPWs HST recoverable account and HST payable account as at March 31,2012 were $7,000 and $18,000,respectively.
d.BPW uses a perpetual inventory system.
e.Inventory is sold at a 100% mark-up on cost.(Cost of goods sold is 50% of the sales price.)
Select transactions in April 2012:
1.BPW purchased inventory on account at a cost of $17,000 plus HST.
2.BPW purchased equipment on account at a cost of $18,000 plus HST.It paid an additional $600 plus HST for shipping.
3.Cash sales-BPW sold inventory for $45,000 plus HST.
4.Sales on account-BPW sold inventory for $35,000 plus HST.
5.BPW paid the supplier in full for the equipment previously purchased on account.
6.At the end of the month,BPW remitted the net amount of HST owing to the Canada Revenue Agency.
Requirement:
Prepare summary journal entries to record the transactions detailed above.

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