Mark's Music is a store that buys and sells musical instruments in Ontario, where the HST rate is 13%. Mark's Music uses a periodic inventory system.
This is their first month of operations and the transactions for the month of January are below.
Company NameBusiness Number Reporting Period for HSTDue Date for HST Mark's Music456789123 Month of January 2019February 15, 2019
Jan. 1Record a journal entry for your name by debiting and crediting $1 to the Bank Account 1010. (Must be your first entry)
Jan. 3Received credit memorandum CM1652 from Western Acoustic Inc., for the return of a defective acoustic guitar $600 plus tax. Terms on credit 2/4, n26. Remember to change account.
Jan. 4Purchased from Fender Supply Limited, four electric guitars at $1,200 each plus HST on invoice number 3865. Terms 2/10, n30.
Jan. 7Issued cheque to Western Acoustic Inc for invoice 1652 and the return on Jan 3. Take any available discount. (Hint. Process payment as if you are paying both the original invoice and the credit meorandum).
Jan. 10Sold two keyboards for cash to walk-in customers (use Cash Customers) for a total invoice price of $2,000 plus applicable taxes.
Jan. 13Purchased from Staples, office supplies for $200 plus tax on invoice number 5697. Paid by cheque.
Jan. 16One of the keyboards from the cash sale of January 10 was returned to the store for a full cash refund because the customer was not satisfied with the instrument. The keyboard was returned to inventory.
Jan. 20Sold one Omega trumpet to Regional Band, on account, for an invoice price of $4,000 plus applicable taxes.
Jan. 24Purchased from Yamaha Canada Inc. (Use Quick add), two saxophones for $1,500 each plus HST on invoice number 2215. Terms 2/10, n30.
Jan. 26Received cheque #2971 for $1,000 from Woodsworth High School as partial payment of invoice A12.
Jan. 29Returned to Yamaha Canada Inc, one of the saxophones purchased on January 24, as it was the wrong model Received a credit memorandum CM2215 from Yamaha for the full purchase price. Terms 2/5, n25.
Jan. 30Issued next cheque to Fender Supply Limited for the purchase of January 4.
Feb. 15Paid the monthly January remittance of HST to the Receiver General. To figure out the amount, run a Gen Ledger report first.