Sunnyside Solar Consultants provided $184,000 of consulting services to Delton D

Question

Sunnyside Solar Consultants provided $184,000 of consulting services to Delton Developments on April 14, 2017, on account. Use the PST rates in Exhibit 10.6.
PST means The Provincial Sales Tax (PST)
Required:
Journalize Sunnyside’s April 14 transaction including applicable PST and GST or HST assuming it is located in:
a. Nova Scotia.
b. British Columbia.
c. Prince Edward Island.
d. Alberta

1

Record the consulting fees earned assuming that Delton Developments is located in Nova Scotia.

2

Record the consulting fees earned assuming that Delton Developments is located in British Columbia.

3

Record the consulting fees earned assuming that Delton Developments is located in Prince Edward Island.

4

Record the consulting fees earned assuming that Delton Developments is located in Alberta.

PST Rate GST Rate HST Rate* Regions with GST Only Alberta Northwest Territories Nunavut Yukon 5% 5% 5% 5% Regions with GST and PST British Columbia Manitoba Quebec Saskatchewan 7% 8% q.q75% 5% 5% 5% 5% 5% Regions with HST New Brunswick Newfoundland and Labrador** Nova Scotia Ontario Prince Edward Island 13% 15% 15% 13% 14% A Harmonized Sales Tax (HST) is applied in place of PST and GST. HST is the combination of the PST with the GST for a total sales tax. For example, for both New Brunswick and Ontario the ST rate of 8% is combined with the GST of 5%, resulting in an overall HST of 13% *The Newfoundland 2015 budget announced that the rate increases from 13% to 15%, effective January 1, 2016

Explanation / Answer

Solution:

Journal Entries - Sunny Side Solar Consultant S. No. Particulars Debit Credit 1 Delton Development located in Nova Scotia: Accounts Receivable (Delton Development) Dr $211,600.00     To Revenue from consulting $184,000.00     To HST Payable (184000*15%) $27,600.00 (Being revenue from consulting recorded) 2 Delton Development located in British Columbia: Accounts Receivable (Delton Development) Dr $206,080.00     To Revenue from consulting $184,000.00     To PST Payable (184000*7%) $12,880.00     To GST Payable (184000*5%) $9,200.00 (Being revenue from consulting recorded) 3 Delton Development located in Prince Edward Island: Accounts Receivable (Delton Development) Dr $209,760.00     To Revenue from consulting $184,000.00     To HST Payable (184000*14%) $25,760.00 (Being revenue from consulting recorded) 4 Delton Development located in Alberta: Accounts Receivable (Delton Development) Dr $193,200.00     To Revenue from consulting $184,000.00     To GST Payable (184000*5%) $9,200.00 (Being revenue from consulting recorded)

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