Question

In providing accounting services to small businesses, you encounter the following situations. 1. Bramble Corporation rings up cash sales and sales taxes separately on its cash register. On April 10, the register totals are pre-tax sales of sales $4,800 plus GST of $240 and PST of $384. 2. (i) During the month of March, Grouper Corporation's employees earned gross salaries of $60,000. Withholdings deducted from employee earnings related to these salaries were $3,254 for CPP, $948 for El, $7,510 for income taxes. (ii) Grouper's employer portions were $3,254 for CPP and $1,327 for El for the month. Prepare the journal entries to record the above transactions.

Answer 1

In the first situation, you need to record the cash sales and sales taxes separately. In the second situation, you need to record the employee gross salaries and withholdings, as well as the employer portions.

Step-by-step explanation:

In the first situation, you need to record the cash sales and sales taxes separately. The cash sales of $4,800 would be recorded as a debit to Cash and a credit to Sales Revenue. The GST of $240 would be recorded as a debit to Sales Tax Expense and a credit to Liability for GST Payable. The PST of $384 would be recorded as a debit to Sales Tax Expense and a credit to Liability for PST Payable.

In the second situation, you need to record the employee gross salaries and withholdings, as well as the employer portions. First, record the employee withholdings as a debit to CPP Expense, EI Expense, and Income Tax Expense, and a credit to Liability for CPP Payable, Liability for EI Payable, and Liability for Income Taxes Payable. Then, record the employer portions as a debit to CPP Expense and EI Expense, and a credit to Cash.