Surfs Up P/L Is a national retailer that sells a range of surfing and water sports equipment (surfboards, clothing,etc.) with an annual turnover of $60 milllon. Surfs Up purchases "Billapro" surfboards for $440 each fromBillapong P/L, a large manufacturer of surfboards located at Gold Coast with an annual turnover of around $45million, this was their only sale for the month. Surfs Up plans to sell the Surfboards at a 200% mark-up to Itscustomers. In October last year it purchased 370 surfboards but a couple of months later (December) theydiscovered that 14 of the surfboards were faulty and subsequently returned these faulty surfboards to themanufacturer, obtaining a full refund. Assume both apply the accrual method of accounting.Requirement:Explain the GST consequences of this arrangement for both companies.

The Goods and Services Tax (GST) is an indirect tax (or sales tax) imposed on the supply of goods…

Answered: Surfs Up P/L Is a national retailer…

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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