Question 1. Larkspur Furniture uses a perpetual inventory system and pays GST on an accrual basis. Larkspur engaged in the following transactions during July 2021. Transactions are inclusive of GST where relevant. July 2 Purchased inventory for cash, $1 045 5 Purchased store supplies on credit for $495 8 Purchased inventory of $3 300 on account. Freight charges of $253, were added to the purchase invoice. 9 Sold goods for cash, $1 320. The cost of these goods was $700. 10 Received the electricity bill, $302.50. 11 Returned $220, of the inventory purchased on 8 July. It was damaged in transit. 12 Purchased inventory for cash for $3 663. 14 Sold inventory on credit terms $11 160, less a $600 quantity discount (cost, $5000). Note: GST applies after the discount. 24 Received returned inventory from the 14 July sale, $440. Larkspur Furniture had despatched the wrong goods by mistake. A credit note was issued. Larkspur’s cost of the inventory received was $250. Ignore previous quantity discount. Borrowed $5,000 from the bank. Signed a bill payable to the bank for this amount. Purchased a computer on credit for $2,200. Required: Journalise the preceding transactions for Larkspur Furniture using multi-column special journals. Post transaction amounts to ledger accounts and prepare a trial balance. Complete the GST Section of the Business Activity Statement for July. As you are only reporting for one month, you will need to use the quarterly reporting option on the BAS statement.
Question 1. Larkspur Furniture uses a perpetual inventory system and pays GST on an accrual basis. Larkspur engaged in the following transactions during July 2021. Transactions are inclusive of GST where relevant.
July 2 Purchased inventory for cash, $1 045
5 Purchased store supplies on credit for $495
8 Purchased inventory of $3 300 on account. Freight charges of $253, were added to the purchase invoice.
9 Sold goods for cash, $1 320. The cost of these goods was $700.
10 Received the electricity bill, $302.50.
11 Returned $220, of the inventory purchased on 8 July. It was damaged in transit.
12 Purchased inventory for cash for $3 663.
14 Sold inventory on credit terms $11 160, less a $600 quantity discount (cost, $5000). Note: GST applies after the discount.
24 Received returned inventory from the 14 July sale, $440. Larkspur Furniture had despatched the wrong goods by mistake. A credit note was issued. Larkspur’s cost of the inventory received was $250. Ignore previous quantity discount.
- Borrowed $5,000 from the bank. Signed a bill payable to the bank for this amount.
- Purchased a computer on credit for $2,200.
Required:
- Journalise the preceding transactions for Larkspur Furniture using multi-column special journals.
Post transaction amounts to ledger accounts and prepare atrial balance .- Complete the GST Section of the Business Activity Statement for July. As you are only reporting for one month, you will need to use the quarterly reporting option on the BAS statement.
- Journalise payment of GST to the ATO on August 1, 2021.
- A junior accountant is confused about why GST appears on the
statement of financial position but not the statement of financial performance. Explain how and why this happens.
Chart of Accounts
101 Cash at bank 203 GST collected
102 Inventory 204 GST paid
103 Store supplies 401 Sales revenue
104
150 Office Equipment 501 Cost of goods sold
201 Accounts payable 601 Freight-in
202 Bill payable 602 Electricity expense
![Simplified BAS - Supplies & Acquisitions
Goods and services tax for the period 01/07/2004 to 31/07/2004
GST accounting method Non-Cash (accruals)
Option 1: Actual GST report quarterly
Total sales & income &
other supplies
Does the amount shown
at G1 include GST?
G1 $
Exports G2 $
Other GST-free supplies G3 $
Capital acquisitions G10 $
Other acquisitions G11 $
yes O no
Show actual GST at 1A and 1B in the Summary
on the back
Option 2: Actual GST report annually
Total sales & income &
other supplies
G1 $
Does the amount shown
at G1 include GST?
O yes no
Show actual GST at 1A and 1B in the Summary on
the back
Option 3: GST Instalment
If varying your amount, complete G22, G23, G24
ATO instalment amount G21 $
If varying your amount, complete G22, G23, G24
Estimated GST for the year G22 $
Varied GST instalment
G23 $
Show at 1A in Summary
Reason for variation
G24](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3dba2142-8d18-4a9c-a6c4-dbb38360d72e%2F865e6f95-2348-4571-a33f-d8449af26167%2F88956tn_processed.jpeg&w=3840&q=75)
![Summary of amounts
Amounts you owe to the ATO
Goods and services tax payable 1A $
Wine equalisation tax payable 1C $
Luxury car tax payable 1E $
4 $
54 $
64 $
7 $
Pay As You Go withholding
Pay As You Go instalment
Fringe benefits tax
instalment
Deferred company/fund
instalment.
1A +1C+1E +4+54 +64 +7 84 $
Payment or refund?
Simplified BAS - Debits & Credits
Is 8A more than 8B?
Yes
No
0
0
0
0
Amounts the ATO owes you
Credit for goods and services tax paid 1B $
Wine equalisation tax refundable
1D $
Luxury car tax refundable
1F $
Credit arising from reduced Pay
As You Go instalments
Credit arising from reduced
fringe benefits tax instalments
5B $
6B
1B + 1D + 1F +58 +68 8B
Show 84 minus 88 in 9. This amount is payable to the ATO
Show 88 minus 8A in 9. This amount is refundable to you
(or offset against any other tax debt you have)
Your payment or refund amount
9
0
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3dba2142-8d18-4a9c-a6c4-dbb38360d72e%2F865e6f95-2348-4571-a33f-d8449af26167%2Fpoaacvq_processed.jpeg&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Step by step
Solved in 4 steps with 3 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Hi May i know why gst is 5%? How to know is 5%?
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)