Question: smith corporation purchases merchandize on account from a supplier on...
Smith Corporation purchases merchandize on account from a supplier on June 30, 2016 for $4,000 plus GST (5%). On July 5, merchandize is sold for $5,000 plus GST to Customer A on account. Assume that the perpetual inventory method is used.
1. Prepare the journal entry to record the $4,000 purchase from the supplier.(7 marks )
2. Prepare the journal entry to record the sale to Customer A. (7 marks )
3. Prepare the journal entry to record payment of GST on these two transactions to the Government of Canada on July 31. (8 marks )
4. How much GST expense will Smith Corporation report on its income statement for these two transactions? (8 marks )
Descriptions and general ledger account numbers are not necessary for