B. Koi Inc., a Manitoba-based retail business, began operations on February 1, 2024. During February, Koi purchased a company vehicle for $50,000 cash and $60,000 of inventory for resale on account. In February, Koi also sold 33 1/3% (i.e., one third) of its inventory for $40,000. As a Manitoba company, all of Koi's purchases and sales were subject to 5% GST. Koi is required to file a GST return with the Canada Revenue Agency quarterly. Koi's first GST return covering the period from February 1 to April 30 will be due on May 31st. Koi is also registered as a vendor under Manitoba's Retail Sales Tax (RST), which requires Koi to charge 7% on the selling price (not including GST) of all its sales, and remit the RST collected to the Manitoba government the following month. Koi also must pay Manitoba RST on all its purchases, except those that are exempt from the tax. The inventory purchased for resale was exempt from Manitoba Retail Sales Tax. Koi uses a perpetual inventory costing system. Required: i. Prepare the journal entries to record the February transactions. ii. How much GST is owed/owing (refund) for February? iii. How much Manitoba Retail Sales Tax is owed for February.

B. Koi Inc., a Manitoba-based retail business, began operations on February 1, 2024. During February, Koi purchased a company vehicle for $50,000 cash and $60,000 of inventory for resale on account. In February, Koi also sold 33 1/3% (i.e., one third) of its inventory for $40,000. As a Manitoba company, all of Koi's purchases and sales were subject to 5% GST. Koi is required to file a GST return with the Canada Revenue Agency quarterly. Koi's first GST return covering the period from February 1 to April 30 will be due on May 31st. Koi is also registered as a vendor under Manitoba's Retail Sales Tax (RST), which requires Koi to charge 7% on the selling price (not including GST) of all its sales, and remit the RST collected to the Manitoba government the following month. Koi also must pay Manitoba RST on all its purchases, except those that are exempt from the tax. The inventory purchased for resale was exempt from Manitoba Retail Sales Tax. Koi uses a perpetual inventory costing system. Required: i. Prepare the journal entries to record the February transactions. ii. How much GST is owed/owing (refund) for February? iii. How much Manitoba Retail Sales Tax is owed for February.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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