Prepare general journal entries for the following four transactions for Entity Ltd. In this question GST is applicable; the NZ rate of GST is 15%. Entity Ltd uses the perpetual inventory system. For this question, do not prepare the journal entry to recognise the COGS.
Prepare general journal entries for the following four transactions for Entity Ltd. In this question GST is applicable; the NZ rate of GST is 15%. Entity Ltd uses the perpetual inventory system. For this question, do not prepare the journal entry to recognise the COGS.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
100%
Prepare general journal entries for the following four transactions for Entity Ltd. In this
question GST is applicable; the NZ rate of GST is 15%. Entity Ltd uses the perpetual
inventory system. For this question, do not prepare the journal entry to recognise the COGS.
![GST exclusive = the cost of the inventory purchased or the sale price without GST
INVOICE
Calculate the GST = $100 x 15%
Whatever x 4 items $100
GST
15
GST inclusive = total invoice amount
Total payable
$115
Prepare general journal entries for the following four transactions for Entity Ltd. In this
question GST is applicable; the NZ rate of GST is 15%. Entity Ltd uses the perpetual
inventory system. For this question, do not prepare the journal entry to recognise the COGS.
Transaction
Type of transaction:
Cost of inventory and sale price
without GST
Invoice total
= GST inclusive
= GST exclusive
Credit purchase of inventory
$26 000
1
2
Credit sale
$26 000
3
Cash purchase of inventory
$26 000
4
Cash sale
$26 000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F4e7931e3-c532-4440-b77b-3f956e8573e1%2F42499dca-de47-41ed-b690-f2fc0f48231b%2Fi4yjnbh_processed.png&w=3840&q=75)
Transcribed Image Text:GST exclusive = the cost of the inventory purchased or the sale price without GST
INVOICE
Calculate the GST = $100 x 15%
Whatever x 4 items $100
GST
15
GST inclusive = total invoice amount
Total payable
$115
Prepare general journal entries for the following four transactions for Entity Ltd. In this
question GST is applicable; the NZ rate of GST is 15%. Entity Ltd uses the perpetual
inventory system. For this question, do not prepare the journal entry to recognise the COGS.
Transaction
Type of transaction:
Cost of inventory and sale price
without GST
Invoice total
= GST inclusive
= GST exclusive
Credit purchase of inventory
$26 000
1
2
Credit sale
$26 000
3
Cash purchase of inventory
$26 000
4
Cash sale
$26 000
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