Whiteboard Review!
Chapter 6
Pete's Painting Service!
• Pete runs a small Painting Service.
• He normally paints people’s homes, when
they are doing renovations.
• He is completely confused when it comes
to HST – he doesn’t know how to
journalize his transactions.
• Help Pete journalize his October
transactios.
October 1
Sales Invoice
• No. 201 to Jane White, $550 plus tax.
Answer:
A/R – Jane White
Sales
HST Payable
621.5
550
71.5
October 5
Cheque Copy
• No.50 to Paint Perfection for the cash payment
of painting equipment. Paid $350 plus tax.
Answer:
Cash
HST Recoverable
Painting Equipment
395.5
45.5
350
October 8
Purchase Invoice
• Painting Press Magazine, No. 1869 for a months
subscription. $16.99 plus tax
Answer:
Subscription Expense
HST Recoverable
A/P – Painting Press
16.99
2.21
19.20
October 12
Cash Receipt
• From Velma Red on account. $650
Answer:
Bank
A/R – Velma Red
650
650
October 15
Bank Debit Advice
• $10 service charge
Answer:
Bank charges expense
Bank
10
10
October 18
John went on KIJIJI and purchased a crate of
painting supplies for $1,000. John bought the
items from Amy, Amy originally had paid the
following amounts for the items:
• Ladder $200, Scaffolding $400, Paint brushes
$350, Rollers $200, Small tools $100
1. How much should John record each of the
items for on his balance sheet?
2. What GAAP principle applies?
3. Record the Journal Entry
October 18 Answer
1. Ladder $160, Scaffolding $320, Paint
brushes $280, Rollers $160, Small tools
$80 = Total = $1000
2. Cost Principle
3. Equipment
480
Painting Supplies
440
Small Tools
80
Bank
1000
October 31
John determines that at the end of the month,
his HST recoverable account has a balance of
$500, and his HST payable account has a
balance of $300. Does he remit his HST or
receive a refund? Record the journal entry
Answer:
HST Payable
300
Cash
200
HST Recoverable
500